Each year, millions of Americans receive a tax refund when they file a personal tax return. Others, however, are unpleasantly surprised to learn that they owe the Internal Revenue Service hundreds or thousands of dollars or more for the tax year. In some cases, individuals owe so much money to the IRS that they cannot afford to pay their full tax bill by the due date. These are the ones that should know where to find a free income tax estimator and how to choose it.
You certainly do not want to pay extra money to the IRS when you file your taxes. However, you also may not want the IRS holding your hard-earned money for months on end until you file your return and collect your refund. Using a free income tax estimator periodically can help you to make the necessary adjustments to your withholding. This way, they are in line with your income level and deductions or credits.
6 Free Income Tax Estimator Options to Use Monthly
Because of how important it is to estimate your tax liability each year and to prepare for this considerable expense, you can easily find a free income tax estimator through several reputable sources. Remember that federal tax rules, rates and guidelines can change from year to year. So, you always need to look for a current model of a free income tax estimator to use.
A free income tax estimator will:
- Ask you for basic information about your income level and deductions or credits;
- Help you determine the ideal number of withholding that you should report to the IRS.
If you are looking for an excellent version of a free income tax estimator, consider these options.
1. The IRS Withholding Calculator
Adjusting your withholding with your employer will directly affect how much tax money is withheld from each paycheck you receive throughout the year. However, tax rates and other factors change. Therefore, it can be difficult to determine from year to year what your withholding should be set out.
The IRS strives to help taxpayers with this challenge by providing with a free income tax estimator for withholding. You should have access to last year’s tax return and your most recent pay stubs. Then, just sit down to use this calculator to maximize the benefit of this calculator.
2. Free Tax Calculator
Another excellent resource for you to use is the free income tax estimator from Drake Enterprises. This is a more robust tool. It requires you to input a considerable amount of data. Because it takes into account many specific factors, it may yield more refined results.
You may want to know how much money you can expect to receive as a refund or how much money you will owe to the IRS. In both cases, this online resource is usually very accurate when correct data is inputted into the calculator.
3. Income Tax Calculator by Intuit
Millions of Americans prepare and file their IRS tax return each year through Intuit’s TurboTax program online. This is a reputable and established name in the industry. Also, the company has created an income tax calculator that you can use before you file your next return.
As is the case with the previous option, this excellent calculator is very robust. It can take several minutes to research and enter all of the details that the calculator asks for. However, in exchange for your efforts, you will have a very accurate tax liability calculation created. This makes it easier for you to adjust your withholding. You can also take other tax planning efforts throughout the year.
4. H&R Block’s Income Tax Estimator
H&R Block is another reputable tax preparation firm that serves many customers each year. Also, it has an excellent online resource for you to use. This free income tax estimator asks about your tax filing status and dependents. It will also need your income and expenses throughout the year in order to estimate your taxes.
H&R Block also has other exceptional resources for you to use, such as a W-4 estimator and an Affordable Care Act estimator. There are many factors that can affect your tax liability. Therefore, learning as much as possible about each of these components to your income taxes can help you to take control of your finances.
5. The Bankrate Tax Estimator
If you are looking for a free income tax estimator that is easy to use and simple to understand, the Bankrate version may be ideal for you to use. This calculator asks you for inputs regarding your income, filing status, deductions, tax credits and tax payments.
Each of these figures is easy to manipulate. So, you can easily make adjustments to learn more about how to reduce your tax liability by making simple and easy changes to your finances. The Bankrate estimator also gives you the results in an easy-to-understand graphical format.
6. SmartAsset Income Tax Estimator
When you want a closer analysis of your total tax liability for the year, the SmartAsset tax estimator is a fabulous resource to use. You simply input your gross household income, the city and state where you live and your filing status.
The estimator provides you with a breakdown of your state, local and federal taxes. This includes income tax, property tax and sales tax. If you have been curious about your total tax liability is, this is a great resource to refer to. It can also help you to determine if you can save money by moving to a different area with a lower tax rate.
To Sum Them Up
You can consider trying out a few tax estimators today to determine what your liability is for the upcoming tax year. When you find a free income tax estimator that you enjoy using, simply bookmark it. Then, use it repeatedly as you need to in the future.
Remember that tax liability can change when you change your marital status, change jobs or move. With this in mind, you may need to use a tax estimator periodically throughout the year to stay on top of your tax liability.
Images from depositphotos.com.