Your personal income tax for each year is calculated based on a number of individual factors, including your filing status, income from multiple sources, tax deductions and tax credits, explains Bankrate. You can calculate your income tax with this knowledge and the appropriate IRS forms.Continue Reading
Your filing status as of the last day of the year determines your tax bracket and influences other factors, such as your standard deduction and personal exemption, Bankrate states. The filing status may be: married filing jointly, married filing separately, single, qualified widow(er) and head of household. If you are married, whether you file jointly or separately is your choice. You can still file a joint return for a year in which your spouse died; if your spouse died during the previous tax year and you filed jointly in the year before, and you have a dependent child or stepchild, you can file as a qualified widow(er). If you pay more than half of home expenses and are unmarried, or are married but have lived apart from your spouse at any point within the last six months of the year, and you have at least one dependent child, you can file as head of household.
Other important factors include your dependents (each dependent allows you to receive a tax reduction, and may make you eligible for tax credits), any capital gain or loss during the year, business income or loss, and income from rentals, royalties, S Corporations and Schedule E, according to Bankrate.Learn more about Income Tax