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  • Having to pay your taxes is one of the few certainties in life, but getting it right can often feel unobtainable. Figuring out how much you owe on your taxes can take a lot of effort if you do not know where to look and what tools to use. Estimating your taxes is not impossible.

    1040es

    The 1040es is a form provided by the IRS to help you calculate you estimated taxes for the year. The 1040es can be used by U.S. citizens and resident aliens, residents of Puerto Rico, U.S. Virgin Islands, American Samoa, the Northern Mariana Islands and non-resident aliens. You will need to use the form if you expect to owe at least $1,000 after subtractions. To use the form you, will need to have your annual earnings and receipts for any deductions. The 1040es informs the user of possible deductions and any changes that may have taken place this tax year that may affect the return. Using this form ensures the right amount of taxes are paid to the IRS, helping you avoid penalties for underpaying.

    IRS Withholding Calculator

    Use the IRS withholding calculator to find out what you can deduct from your annual taxes. The IRS withholding calculator is available for free on the IRS website. The calculator helps you find the correct deductions for pension plans and unemployment compensation and takes into account annual changes to the tax such as the 2009 American Recovery Act Reductions. You will need your most recent pay stubs and your most recent tax return so that you can fill in all the required fields.

    Deductions and Credits

    When estimating your annual taxes, find tax credits as well as deductions to lower the amount of taxes you are required to pay. Credits reduce the amount of money you owe on your taxes, but unlike a deduction, credits give you a a dollar for dollar reduction as opposed to the percent you receive for a deduction. If you are in the 25 percent tax deduction bracket, you pay $25 less on each $100. New credits have been added by the IRS as part of the Making Work Pay program in the 2009 tax year. Look for credits that apply to your financial situation.

    Source:

    Taxes

    IRS Tax Withholding Calculator

    Penalties for Underpayment of Taxes

    Resource:

    IRS 1040es

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