How to Calculate Income Tax Expense
- 1). Fill out the exemption portion of the 1040 on page 1. Place the figure on page 2 under Tax and Credit. This is normally 42. Multiply the number of exemptions by the figure stated. In 2009 the figure is $3,650 of exemption credit for each individual.
- 2). Flip back to page 1. Place the estimated gross income on line 7. Place business income or loss on line 12. Place unemployment compensation on line 19. Read through the rest of the items listed under Income and fill in the boxes according to last year's tax return. Add the amounts together and place the figure in line 22.
- 3). Read through the Adjusted Gross Income and place any figures in the boxes that apply. Use estimated figures according to the previous year's income tax. Add the figures together and put the answer in box 36. Subtract box 36 from box 22 and place the answer on line 37 and line 38.
- 4). Move to page 2. Read line 40a and place the appropriate standard deduction in the box. Subtract line 40a from the figure on line 38 and place on line 41. Subtract line 42 from line 41 and place the answer on line 43. This is your taxable income.
- 5). Look in the 1040 instruction book and locate the area with the income to tax information. Locate the amount listed on line 43. Follow the line across to the proper filing status. This is the estimated income tax expense for the current year.
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