3 Steps in Finding Out Which Tax Bracket Your In

October 5, 2018

Taxes can be confusing and frustrating. One of the most complicated aspects of paying your taxes is determining your tax bracket. This is crucial knowledge so you’re aware of how much you’ll need to pay to the IRS. Thankfully, with the help of Los Angeles company advisors, you can figure out your tax bracket easily. All it takes is three easy steps.

1. Calculate Your Taxable Income

The first step to figuring out your taxes is figuring out your income. Here’s how to do this:

• Estimate your adjusted gross income (AGI): Your AGI is how much you make in one year minus any pre-tax changes, like retirement account contributions. You can use your previous year’s tax return, previous W-2 forms, or pay stubs to estimate this number. Los Angeles accounting services can help you determine this number.
• Calculate your deductions: Next, you’ll need to determine whether you’ll take standard deductions or itemize your deductions. You’ll also need to figure out the threshold for your personal deduction.
• Subtract your deductions from your AGI: This will give you your taxable income.

Once you know your taxable income, you can move onto your filing status.

2. Figure Out If You Are Filing as Single or Married

If you are single, legally separated, divorced, or married but filing separately, you will finalize under the “Single” status. On the other hand, if you wish to file your tax returns with your spouse, you will choose the “Married” designation. If you file jointly, you combine your income to determine your tax bracket.

3. Determine If You Are Head of Household

If you are single, live with at least one dependent, and provide over half the income to support your household, you qualify for the “Head of Household” tax status.

If you need more help with your taxes, you can talk to an Encino accountant.

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