How to Estimate State & Local Taxes for Tax Filing
- 1). Find a copy of your W-2 form from last year. Calculate the percentage of taxes you paid to the state and local government by dividing the tax amount by your salary. For instance, if you earned $40,000 a year and paid $400 in local taxes, you have a local tax rate of 1 percent.
- 2). Calculate the amount of state and local taxes you expect to pay for the coming year by multiplying your annual salary by the tax rate you calculated in Step 1. For instance, if you earn $50,000 a year and have a state tax rate of 4 percent, you can expect to pay $2,000 in state income taxes.
- 3). Review copies of your state and local income returns. Look at the bottom line to determine whether you broke even, received a refund or paid extra money.
- 4). Subtract the amount of any refund you received from the tax liability you calculated earlier. If you owed additional taxes, add that figure to the tax liability you calculated.
- 5). Use the state and local tax estimates you calculated in your tax planning. Always wait for official figures before actually filing your taxes.
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