Filing the income tax return on your own every year is not that difficult a task to perform. The only thing you need to know while doing so is to accurately calculate your income tax. Determining your income tax is a simple process which involves easy mathematical calculations with the help of given tax rates and formulae.
The income tax calculation requires you to determine the taxable income first. For calculating the taxable income, there are basically two factors that you need to understand; the gross income and the tax deductions as well as tax credits. The gross income is the summation of all money that you have earned in a particular tax year through various sources such as your regular monthly income, investments, inheritance and sale or lease of property.
Make a sheet of all that you have earned and total it up; consequently you will have your gross income. Coming to tax deductions, these are amounts that can be lessened from your gross income. There are certain expenses that you make which have been defined as tax deductible. Check up with your expenses and make a list of all those bills which are tax deductible. Also, some of your investments in stock options, bonds or mutual funds may provide you with tax benefits. The total of all these amounts is your tax deduction. Once you have the figures for both, the gross income as well as tax deduction and credits, lessen the amount of deductions from the gross income. The amount that remains after subtraction is your taxable income.
After calculating the taxable income, you can refer the tax rates and brackets chart as defined by the IRS for the current year. Look in the chart for the tax bracket that you belong to and according to the corresponding tax rate, calculate the income tax.