How to Calculate Income Tax Expense

Use a calculator to figure estimated income tax expense.

Income tax expense is based on a percentage of gross yearly income. Several exemptions and deductions reduce the gross income to taxable income on the Federal 1040 form. The Federal income tax rate has six brackets. The filing statuses include "single," "married filing jointly," "married filing separately" and "head of household." The Federal income tax rate ranges from 10 to 35 percent. Figure an estimated income tax expense for the year by filling out the prior year's Federal 1040 form with estimated figures.

Step 1

Fill out the exemption portion of the 1040 on page 1. Multiply the number of exemptions by the figure stated on Form 1040 line 42 and enter this amount on that line number. In 2012 the figure is $3,800 of exemption deduction for each individual.

Step 2

Flip back to page 1. Place the estimated gross wages on line 7. Place business income or loss on line 12. Place unemployment compensation on line 19. Read through the rest of the items listed under the Income section and enter estimated amounts based upon last year's tax return. Add the amounts together and place the total on line 22.

Step 3

Read through the Adjusted Gross Income section and place any figures on the lines that apply. Use estimated figures according to the previous year's income tax return. Add lines 23 through 35 together and enter the total on line 36. Subtract line 36 from line 22 and place the answer on lines 37 and 38.

Step 4

Move to page 2. Read line 40 and place the appropriate standard deduction in the box based upon your filing status. Subtract line 40 from the figure on line 38 and place on line 41. Subtract line 42 from line 41 and place the answer on line 43. This is your taxable income.

Step 5

Locate the tax tables in the 1040 instruction book. Locate the amount listed on line 43. Follow the line across to the proper filing status. This is the estimated income tax expense for the current year.


This is only an estimate since tax laws and amounts change each year.

Things You'll Need

  • Previous year's Federal 1040 form

  • Previous year's Federal 1040 instructions

  • Pencil

  • Calculator