How to Figure Out Your 2010 Taxes From Your Paychecks
- 1). Go to the Internal Revenue Service website to download the Circular E tax guide. Employers and payroll services use the Circular E to determine how much in federal taxes to withhold from employees' paychecks.The U.S. Treasury requires employers to withhold federal, state and local income taxes from employees' paychecks.
- 2). Check the amount the employer withholds to ensure accuracy and to estimate the taxes you will owe or the refund you will receive when you file your tax returns. Multiply the amount withheld from one paycheck by the number of paychecks you will receive for the year to get a rough estimation of the federal income tax you will pay by the end of the year.
- 3). Use the IRS's online withholding calculator to determine a more accurate estimate of the taxes your employer should withhold for each pay period. Follow the very simple instructions. Enter your general information, child and dependent care information, income, withholding information and deductions. The calculator will compute the estimated amount of your tax for the year and the amount that you will have withheld by the end of the year.
- 4). Change the amount that your employer withholds every pay period by filling out and turning in to your company a new W-4 form. If you increase the number of deductions that you claim, your employer will withhold less in federal taxes. If you decrease the number of deductions that you claim, your employer will withhold more in federal taxes.
- 5). Redo your calculation for the next year, using the information from your first paycheck for the pay period starting after January 1. The tax tables change annually, and sometimes more often than that, as the government changes the withholding amounts due to inflation or new tax rules. The IRS updates its calculator as needed.
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