What is a Tax Calculator?
• A tax calculator is a vital, yet simple resource, used to calculate and evaluate an expected tax refund. A tax calculator requires the user to enter a few components, which are aligned with the individual’s tax return. The information offered by the tax calculator enables an individual to accurately plan and observe their expected tax return during the corresponding taxable year.
• The information needed to compute an individual’s expected tax return on a tax calculator revolves around the tax payer’s income, their expected write-offs, their expected capital gains or losses and the amount of taxes already fulfilled. Additionally, the typical tax refund calculator does not ask for any personal information such as the taxpayer’s social security number.
• There are numerous types of tax calculators, but all aim at achieving a universal calculation or estimation tied into the individual taxpayer’s return. For instance, the IRS releases a withholding calculator every fiscal year. The Withholding calculator is used by employees who would like to view their estimated amount of income withheld by their employer. This specific tax calculator is aligned with the ever-changing regulations instituted by the Internal Revenue Service.
• The results from the tax calculator will vary based on the individual’s tax return. That being said, one task or estimate that the tax calculator cannot account for is how much money the taxpayer owes to the corresponding local and federal governments.
• A tax calculator is typically sponsored by a major tax preparation company. These types of companies may ask for personal contact information in order to utilize the tax calculator.