Want to get a sense of the impact of a tax move? Well, there are certainly many online resources available. Among these are plenty of tax calculators, which are fairly easy to use and all for free!
Granted, you should still use caution: When it comes to tax calculators, you are getting estimates. So make sure you seek out professional advice or use a trusted online tax preparation service – such as from H&R Block (HRB) or Intuit’s (INTU) TurboTax — when making real financial decisions. Taxes are subject to lots of changes and are often confusing.
OK then, so what are some of the tax calculators to consider? Here’s a quick look at five of the best.
Refund Tax Calculator
What it does: No doubt, when it comes to taxes, most people are concerned about one thing: the amount of the refund. So to find out — or get a pretty good estimate — there are quite a few online tax calculators to help out. Granted, they can be extensive and require quite a bit of input. But even if you do not provide all the information about your tax situation, you should still get a good ballpark figure. What’s more, these tax calculators can be a good way to gauge the impact of a tax play, such as the savings by setting up an IRA.
Where to find it: H&R Block has a straight-forward tax calculator, which provides a step-by-step process to estimate your refund.
Check it out here.
Obamacare Tax Calculator
What it does: Keep in mind that a key part of Obamacare is the tax system. Essentially, there are potential subsidies for insurance premiums. But what makes these so complicated is that a taxpayer can take these subsidies before filing a return. The result is that there are new forms like Form 1095-A, Form 1095-B and Form 1095-C. Oh, and for those people who did not have insurance, there may be penalties, which come right out of your refund (or may cause you to owe money). But there are calculators that can help provide some answers and guidance, even helping to suggest exemptions for the penalty.
Where to find it: A solid calculator for Obamacare is from H&R Block. It asks only a few questions but provides helpful tax advice and exemption ideas.
Check out H&R Block’s Obamacare tax calculator here.
Caregiver Tax Calculator
What it does: With the aging of the population, it is becoming more common to use caregiver services for patents or grandparents. And yes, the costs can be high. But there are also tax consequences if you pay someone more than $2,000 for the year. You will not only have to pay and withhold taxes (such as for Social Security, Medicare and unemployment) but deal with lots of paperwork, such as issuing W-2 forms and filing Schedule H, I-9 and W-4. If not, you could be subject to serious fines and penalties.
Where to find it: A helpful tax calculator comes from Care.com (CRCM), which is a provider of resources for caregivers. There is also a cost-effective service that handles all the paperwork, called HomePay.
Check out Care.com’s tax calculator here.
Education Tax Calculator
What it does: The IRS provides a variety of tax breaks for education. For example, there is the Lifetime Learning Credit, which provides a benefit of up to $2,000, and the American Opportunity Tax Credit (which has a max of $2,500). But you may also be able to deduct tuition and fees (up to $4,000) and student loan interest of as much as $2,500. But of course, the rules can get a bit tricky.
Where to find it: TurboTax has a straightforward education tax calculator.
Check TurboTax’s education tax calculator here.
Capital Gains Tax Calculator
What it does: With investing, the tax impact can substantial. After all, the long-term capital gains rate is actually zero for some investors! There are also some helpful strategies that involve timing the gains and losses to help lower the tax bite (here’s a recent post I did on this exact topic.
Where to find it: BizDeductor has a calculator that can provide an estimate on the capital gains tax for a transaction. Now, in full disclosure, this is from my own site — but hey, it’s free!
Check BizDeductor’s capital gains tax calculator here.
Tom Taulli is an Enrolled Agent (the highest designation for the IRS) and the founder of BizDeductor, which offers services and apps to help save a bundle on taxes. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.