This is used to find out what the estimated taxpayers' tax liability may be. The taxable income is calculated using exemptions and deductions. Taxable income is always lower than gross income. For each exemption claimed, $4,050 is subtracted from the taxable income.
Tax calculators can be used to estimate self-employed expense, tax bracket, W-4 withholding, and dependents credit & deductions.
The government has specific documents that taxpayers are required to fill out when paying taxes. Forms are also required from state and city (each form may vary).
1040: This form is used to file annual income tax returns and to report deductions and income.
1040A: This form is used when taxpayers have no itemized deductions, do not own businesses, and have taxable income of less than $100,000.
1040EZ: This form is for taxpayers whose filing state is single or married filing jointly and
Zero dependents.
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