HOW MUCH WILL I PAY?
Paying taxes is also called “filing” taxes. How much you pay depends on three things:
- How much money you made for the year
- Your filing status (for example, whether you are single or married)
- How many and what kinds of deductions you can take
When you file taxes, you start with your “gross income” which is the money you made from a job (reported on a W-2 form), plus any other income (for example, from a business or investments). Then you can take “deductions” for things like child care expenses, donations to charity and money you put in an IRA retirement account. What is left is your “Taxable income.” That is the amount you pay taxes on.
taxable income = gross income - tax deductions
Some people do not have to pay any taxes if most of their income is from social security.
Back to Income Tax