How to use this Tax Calculator:

• Filing Status: Choosing the correct filing status is very important, as it determines the income levels for your Federal tax bracket, your standard deduction, personal exemption, and deduction phase out of incomes, etc.
• Married filing jointly: If you were married on the last day of December 2006, you can file a joint return with your spouse. If your spouse died during the tax year(2006), still you can file a joint return.
• Qualified Widow(er): You can choose this status if your spouse died during the previous tax year (2005) and you and your spouse filed a joint tax return in the year immediately prior to their death (2004). You are also required to have at least one dependent child or step child for whom you are the primary provider.
• Single: If you are unmarried, divorced, or legally separated as of the last day of the year, you should select single filing status.
• Head of household: Select Head of Household as filing status, If you are an unmarried individual with at least one qualifying relative and you pays for more than half of the cost to keep up a home.
• Married filing separately: If you are married, you have the choice to file separate returns. Choosing this filing status may result in less refund.
• Gross Income. Enter your total Gross Income by adding all your 2006 wages, salaries, tips, interest, dividends and gains, etc.
• Dependents. A dependent is someone you support and for whom you can claim a dependency exemption. For each dependent you claim, you get ,300 reduction in your taxable income.
• Itemized Deduction: Enter the itemized amount, if you have some idea about total itemized deduction amount for 2006. If you itemized in 2005, then use 2005 Schedule A as a guidelines. If you are not sure leave it default and standard deduction for your filing status will be used automatically.
• Total Tax paid. If you know the total tax you paid or planning to pay in 2006 (estimated taxes, etc) enter it here. This data is used only to estimate the tax refund amount you can expect while filing income tax return in 2007.
• Personal Exemption. This field will show the total Personal and Dependency Exemption amount. An exemption is worth ,300 reduction in your taxable income, unless your AGI is very high. You get one exemption for yourself. If the filing status selected is Married Filing Jointly, then an additional exemption will be added automatically for the spouse. For each dependent you claim, you get ,300 reduction in your taxable income. At higher Income levels the exemption amount will phase out.
• Taxes Due. Your total estimated 2006 taxes will appear in the Taxes Due field.

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