Friday, September 5, 2008

Federal Tax Calculation

Simple way to calculate the federal income tax...

Total Income (TI) : Gross Income reported on each of the W2s + All the Interest income + any other additional income
Exemptions (E) : Number of persons * 3400
Adjusted gross Income (AGI): TI - E -10700 (Standard deductions, could vary for Itemized deuctions)

Federal tax owed = AGI * TX%

Now is TX% calculated by slabs ...

For example, FY 2008 , Married Filing Jointly see the table in the image --->



For more details regarding the tax calculations visit this link












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