How can I estimate my taxable income?

Estimating your taxable income involves several steps, and it is important to understand the components that contribute to it. Taxable income is essentially your total income minus any allowable deductions. To begin, gather all sources of income, including wages, interest, dividend income, rental income, and any other earnings. Next, identify applicable deductions. Common deductions may include contributions to retirement accounts, student loan interest, and certain medical expenses. The standard deduction might also apply, which for tax year 2023, has specific amounts based on your filing status. After calculating your total income, subtract the deductions from that total to arrive at your estimated taxable income. You may also want to consider tax credits, which can reduce your tax liability and should be factored into your overall tax planning. Lastly, it might be beneficial to use tax preparation software or an online calculator. This can help streamline the process, giving you a clearer picture of your possible tax obligations. For specific guidance tailored to your situation, visiting the relevant section of the Delaware Department of Revenue's website may provide additional resources and information.