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Explanation of the Additional Inputs
- Filing Status:
Affects both federal and state tax calculations, as tax brackets vary by filing status.
- Number of Dependents:
While the current calculator doesn’t calculate tax credits, this input allows for future enhancements, such as adding the Child Tax Credit.
- Deduction Type:
Users can choose between the standard deduction and itemized deductions, which impacts taxable income.
- Itemized Deductions Amount:
If the user selects “Itemized Deductions,” they can input their total itemized deductions.
- Pre-tax Contributions:
Includes contributions to retirement accounts (e.g., 401(k), IRA) and HSAs, which reduce taxable income.
Important Considerations
- Tax Year Updates: The tax brackets and standard deduction amounts are based on the 2023 tax year. Ensure you update these values annually.
- Limitations:
- The calculator does not account for all possible tax situations, such as alternative minimum tax (AMT), capital gains tax, or specific state tax credits.
- It simplifies complex tax codes to make the calculator user-friendly.
Disclaimer
- Educational Purposes: This calculator is intended for educational and estimation purposes only.
- Not Professional Advice: It should not be considered as professional tax advice.
- Consult a Professional: For accurate and personalized tax calculations, please consult a certified tax professional or use official tax software.