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How to Calculate your federal income tax?

Have you ever struggled with calculating your federal income tax? The tax code can be confusing and it causes a lot of misconception. However, we have simplified the basics of federal taxation

You don’t have to pay income tax on every cent you earn. To figure out your Net earnings, you need to subtract your business expenses from your gross income.

Once you’ve figured out your net earnings, you need to subtract them with your above-the-line deductions (student loan interest, retirement fund, and 50% of your self-employment income) to calculate your AGI. Now to figure out your taxable income, you need to subtract your below-the-line deductions from your AGI. The amount you achieve by following the previous step will put you in a certain tax bracket, which you have to go with.

The final step will involve you applying for the right % to the correct income levels and then adding it up to find the final amount.

Still, find it tricky?

Download the FlyFin app and automate this entire process and make your taxes effortless.

How to Calculate your federal income tax?

Jessica Smith

Jessica is the author in charge of our website. Moreover, she takes care of all the back office and business administrative duties. Jessica is the mom of two adorable kids.

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