How to Calculate Federal Taxes Paid by Percent

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Federal taxes are required to be paid by almost all United States employees. Many employers deduct federal taxes automatically based on whether you have dependents or not. Freelancers or contractors must deduct and pay federal taxes on a quarterly basis. By law, employees making over $400 a year are required to report their earnings and pay federal taxes. Calculating your federal taxes paid by percentage will help you know exactly how much of your paycheck will go towards federal taxes in the future.

Things You'll Need

• Recent pay stub or tax return

Instructions

1. Find your adjusted gross income. This can be found on your most recent W-4 or tax return. If you don't have either of these on hand, see Step 2.

2. Estimate your income based on your pay stubs, whether paper or electronic. Determine the average number of hours your work per week. For instance, if you work 40 hours some weeks and 50 hours other weeks, your average number of hours would be 45. Multiply this number by the amount you make per hour. Multiply the result by the number of weeks you work per year. For most people, this will be 52. For instance, 45 hrs/wk X $15/hr X 52 weeks = $35,100.

3. Deduct any non-taxable income from the adjusted gross income. This includes insurance, flexible spending accounts, and any other deductions that aren't taxable.
   For instance, if you have a flexible spending account each year of $2,000, your adjusted gross income of $35,100 would now be $33,100.

4. Determine your tax bracket. The percentage of federal taxes you pay is based on your tax bracket. See the Tax Bracket website or the IRS website in the Resources section to determine your bracket.

5. Multiply your yearly income from Step 3 by the tax bracket percent to determine your federal taxes. For instance, $33,100 falls into 25% bracket. The federal taxes would be $33,100 X .25 = $8,275. This amount doesn't include any other deductions you may be entitled to. Deductions vary by person and situation.

Tips & Warnings

• If you pay estimated quarterly taxes, pay at least 30 percent divided between federal and state. If your state doesn't require you to file taxes, pay 25 percent to federal.

• Never try to shortchange the IRS on your taxes. If anything seems incorrect about the amount of taxes you are paying or you're unsure about anything when filing your taxes, talk to a tax professional. You can meet with a tax professional in person or through an online chat.

Resources

• IRS Website
• Tax Bracket Percentages