Find Your Adjusted Gross Income

• 1). Gather your paystubs or W-2s and total the amounts in the Wages, Tips and Compensation boxes. Add to this amount any additional income from interest, dividends, alimony, capital gains, rental real estate, social security benefits, and unemployment compensation. Any other income must be added here as well. The resulting answer will be your total income. Set this total aside.
  
  
• 2). From your total income subtract the deductions listed in lines 23 through 35 of the IRS Form 1040. These include business expenses, Health Savings Accounts deductions, Moving expenses, one-half of the self-employment taxes if this applies, deduct self-employed retirement contributions and health insurance deductions, alimony paid, the traditional individual retirement account deduction, student loan interest, and tuition and fees.
  
  
• 3). Add these deductions together and subtract from the total income. The result will be your adjusted gross income.
  
  

Subtract the Exemptions and Deductions

• 1). Calculate your deductions by using either the standard deduction or the itemized deductions. The standard deduction is based on your filing status. For example, in 2009, filing as "single" or "married filing separately," your standard deduction was $5,700. Married filing jointly it was $11,400, and Head of Household $8,360.
  
  
• 2). Add up all deductions if you are using itemized deductions. Get a copy of the prior year's return and look for the Schedule A. If the amounts spent in the current year are close to the amounts spent in the previous year you can use that amount, found on line 40A, as an estimate for the current year. These itemized deductions include mortgage interest, real estate taxes, medical expenses over two per cent of your adjusted gross income, and state sales taxes.
  
  
• 3). Multiply the number you entered on line 6D; this is the number of exemptions, or people in your home you are claiming as dependents. Multiply this number by the amount given for each exemption. In 2009, this amount was $3,650.
  
  
• 4). Subtract the exemptions and deductions from the adjusted gross income and put the result on line 43. This result will be your taxable income. Look at the current year's tax table and use the amount on line 43 to look up the taxes you owe. The tax table is organized by filing status and income amount. Find your taxable income and scroll over to the taxes owed for that amount of income. Enter that amount in line 44 of the 1040. The total you get will be what you owe for federal income tax. This total however, does not account for the refundable tax credits and the amounts you've already paid in federal withholding.
  
  

Subtract Other Taxes and Payments Made to Get Total Taxes Owed

• 1). Add any taxes you have paid for self-employment, social security, individual retirement accounts and other retirement plans you paid taxes on. Add all of the advanced earned income credits you received, or household employment taxes you paid. The result will be the total tax on line 60. Write this total down and set it aside.
  
  
• 2). Enter the amount of federal taxes paid from your W-2s and 1099s. Add any refundable tax credits like earned income credit (EIC) and the additional child tax credit. Use the EIC tables to find the amount of EIC you are eligible for. This table is organized by income amount and number of children you have. When the total payments have been calculated, enter the amount on line 71 on the 1040.
  
  
• 3). Subtract the total payments made from the total tax. If the total payments made are greater than the total tax owed, the result will be your refund. If the total payments made are less than the total tax owed, the result will be your total taxes owed. This will be the final result of your federal income taxes in Tennessee.