How Your Taxes Are Calculated

Your employer will give you a Form W-2 after the close of the tax year if you have a regular job. The form details how much you were paid and how much was withheld from your pay for taxes. This information is then transferred to your tax return and determines how much you owe—or are owed—in taxes or a refund.4

Self-employed people and independent contractors receive Forms 1099. These don’t detail withholding because self-employed taxpayers are responsible for remitting their own taxes as the year goes on. Other 1099 forms might be issued to you from banks or investment firms where you’ve accumulated interest income.

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