Chapter 13: from taxable income to refund or balance due
Chapter 13 is the road map from your taxable income to the last line of the return. Here is the order of the math, what changed from 2023 to 2025, and what to watch for 2026.
Prepared by Prem Tax and Accounting Corp. Last checked against official sources on October 26, 2026.
Chapter 13 carries your taxable income to the bottom line: tax owed, tax paid, and the gap. It is on printed pages 106 to 108 of Pub 17 (2025) and pages 107 to 109 of the 2023 and 2024 editions. Think of this page as a friendly summary; the IRS publication has the last word.
- In 2023, 2024 and 2025, taxable income under $100,000 uses the Tax Table; $100,000 or more uses the Tax Computation Worksheet.
- The order is fixed: income tax, any alternative minimum tax (AMT), credits off, other taxes on. That is total tax.
- Compare total tax with total payments, which include withholding, estimated payments and some credits.
- The IRS figures your tax only on simple, on-time returns. Itemizing rules it out.
The path to your bottom line
- Income tax. Use the table or worksheet (2025 Form 1040: line 15 is taxable income, line 16 is tax). Capital gains, pension lump sums, farm income, a child's investment income and foreign earned income have their own methods (Pub 550, Pub 575, Schedule J, Form 8615, Form 2555).
- AMT. A parallel minimum-tax calculation on Form 6251.
- Credits. These come off next, such as the child tax credit (Schedule 8812).
- Other taxes. These go on, such as self-employment tax (Schedule SE).
- Payments. Withholding (line 25), estimated payments (line 26), and credits that act like payments, like the earned income credit.
- Result. More paid than owed is a refund. Less is a balance due.
The Tax Rate Schedules at the back only show rates; Pub 17 says not to use them to work out your tax.
When the IRS can figure it for you
If you file by the regular due date (extensions do not count), Pub 17 says the IRS can figure your tax for you. It cannot if you:
- want direct deposit or a refund carried to next year's estimated tax;
- itemize, or have taxable income of $100,000 or more (all years);
- have income beyond wages, interest, dividends, pensions and similar items;
- file certain forms, such as 2555, 6251, 8606, 8615, 8814 or 8889.
Numbers by year
| Year | AMT exemption, single | AMT exemption, joint |
|---|---|---|
| 2023 | $81,300 | $126,500 |
| 2024 | $85,700 | $133,300 |
| 2025 | $88,100 | $137,000 |
| 2026 planning | $90,100 | $140,200 |
For 2026, treat the numbers as planning figures (source: Rev. Proc. 2025-32 and the 2025 law), since the IRS has not issued Pub 17 (2026). The single-filer exemption starts shrinking at $626,350 in 2025 but at $500,000 in 2026. The method did not change; the 2025 AMT list adds the new senior deduction.
An invented example
Invented couple, tax year 2025, married filing jointly, two children under 17, taxable income $210,000.
- Tax: the worksheet row for $206,700 to $394,600 is 24% minus $14,306. $210,000 times 0.24 is $50,400, minus $14,306 is $36,094.
- Credit: 2 children times $2,200 is $4,400. Total tax is $36,094 minus $4,400, or $31,694.
- Payments: $30,500 withheld plus $1,000 estimated is $31,500, leaving $194 due.
Mistakes people make
- Using one bracket rate on all income instead of slice by slice.
- Treating the Tax Rate Schedules as the calculator.
- Forgetting credits that count as payments, or taxes explained elsewhere.
Quick check
A single filer's 2025 taxable income is exactly $100,000. Which method, and what tax? (2025)
Answer: The worksheet, which starts at $100,000. The row is 22% minus $5,086: $22,000 minus $5,086 is $16,914.
A single filer's 2025 taxable income is $150,000. What does the worksheet give? (2025)
Answer: $28,847, from 24% minus $7,153: $36,000 minus $7,153.
Invented: total tax $6,200, $5,400 withheld, $1,100 estimated, $300 earned income credit. Refund or balance? (2025)
Answer: A $600 refund. Payments are $5,400 + $1,100 + $300 = $6,800, and $6,800 minus $6,200 is $600.
Common questions
Do I need this chapter if software does my return?
Software follows the same steps, and you still sign, so a feel for them helps you catch a wrong number.
Will I owe the AMT?
It is a separate calculation on Form 6251 that depends on adjustments such as state and local tax deductions. Ask before assuming.
Where can I see 2026 rates now?
Our [2026 tax brackets page](/tax-brackets-2026/) lists them. The 2026 Tax Table comes with Pub 17 (2026), which we expect around mid-January to February 2027.
Official sources
- IRS Publication 17 (2025), chapter 13
- IRS Publication 17 (2024), chapter 13
- IRS Publication 17 (2023), chapter 13
- IRS Revenue Procedure 2025-32, tax year 2026 inflation adjustments
Keep reading
- Child Tax Credit and ODC (Pub 17 Chapter 14)
- Key Tax Numbers by Year, 2023 to 2026
- Standard Deduction 2023 to 2026: Pub 17 Chapter 10
- Withholding and Estimated Tax (Pub 17 Chapter 4)
Let's talk about your taxes, your business, your plans.
Tell us what you need and we will get back to you quickly. There is no pressure: just a friendly conversation and a clear next step.
4260 Westbrook Dr, Suite 107
Aurora, IL 60504
Monday to Friday, 9:00 am to 5:00 pm, by appointment. Saturday and Sunday by appointment when needed.