Learn how to figure your tax with these simple instructions
- Start with your income (ex. Job, unemployment insurance)
- Then take away your adjustments, deductions, and exemptions (ex. Student loan interest, Head of household, You + dependents)
- Whatever’s left is taxable income (ex. $0.00 or more)
- Taxed at your tax rate (ex. 10% to 35%)
- Leaving you with your tax (ex. $0.00 or more)
- Which can be reduced by credits that aren’t refundable (ex. Childcare, education, retirement, child tax credit)
- And reduced more by payments & credits that are refundable (a refundable credit is a credit that you can get as part of your refund) (ex. Withholding, earned income credit, additional child tax credit)
- Payments & credits not needed to pay tax all go into your refund (ex. $$$!)
- That you can direct deposit into up to 3 separate accounts (ex. Checking account, Savings account, U.S. Savings Bond)
(from United Way of Massachusetts Bay and Merrimack Valley; www.mass211.org)
