How to calculate the Income Tax?

Answer 1

There are two ways to calculate Income Tax. The regular way is based on the gross income minus any applicable deductions and then a marginal tax percentage is applied according to the taxpayer's income bracket. From this result, any applicable tax credits are subtracted and the result is the income tax owed. If the result is a negative number due to refundable tax credits and/or if the Federal Withholding Tax was greater than the income tax that was actually owed, the taxpayer is entitled to a tax refund.

The second way, the Alternative Minimum Tax (AMT) is based on the gross income, computed without regard to certain tax preference items (such as tax-exempt interest on certain private activity bonds) and with a reduced number of exemptions and deductions. This higher income base is taxed in two rate brackets, 26% and 28%, depending on taxpayer income.

For more information or to get legal help visit-

http://www.legalservices4less.com/taxlaw.htm

Answer 2

Gross income can be defined as the income from all sources prior to any deduction or taxes. From a company’s perspective it has to be total revenues earned after deducting the cost of sold goods. In the following steps, we will help you calculate the gross income for tax purposes.
Instructions
Difficulty: Moderately Easy
Gross Income for Companies
Steps
1Step OneDetermine your gross receipts. Any income that is connected to your business qualifies to be called business income. This includes any receipts in cash, checks, credit card payments, rents, dividends, promissory notes, waived off/canceled debts, damages, barter deals and economic injury payments.
2Step TwoSubtract returns and allowances from the gross receipts and calculate the net receipts. Returns and allowances consist of refunds to customers, rebates, discounts or any allowance on the sales price.
3Step ThreeDetermine the cost of goods sold. For that you need to consider the following: a) total inventory as on the first day of the year, b) net purchases and c) labor costs and other costs. From the sum of all these, deduct the total inventory as on the last day of the year and you will arrive at the cost of goods sold.
4Step FourDeduct the cost of goods sold from net receipts and add other income like fuel tax credits and you

Answer 3

Let the CA's earn their livilihood. Visit one of them. Or have an Income Tax calculator software, available on net.
or visit above mentioned sites

Answer 4

Get the instruction booklet and blank forms for the 1040EZ, 1040A or 1040. Just fill in the blanks as they pertain to your individual circumstances.

Answer 5

Fill out a form 1040EZ, 1040A, or 1040, whichever you qualify for, and follow the instructions. The forms and instructions can be downloaded at irs.gov