The only truly hard part about taxes is figuring out your net income if you have a business or a large number of asset sales. Otherwise it's quite simple. Ten years ago I built my own tax computation software using Excel. I keep it up to date, and I can predict my state and federal tax liabilities to within $10 if my income estimates are accurate. The Excel file even graphs marginal tax rate and AMT versus income for any tax year I choose, from 2001 to 2010. However I still use TaxCut to prepare my tax returns, because it saves me time and because it sometimes catches an error. Now it's true that today's tax code uses phase-outs and such to obscure the true marginal tax rates. Tax software allows us to pull back the curtain and reveal the marginal rate in just a few minutes: 1. Write down your state and federal tax liabilities, or merely your tax due/refund amounts. 2. Add $1000 to your income as "other income" 3. Repeat step 1. 4. Subtract the step 1 results from the step 3 results. This is how many dollars the federal and state tax liability increased due to the $1000 additional income. 5. Divide the results by 10 and you have your federal and state tax brackets, respectively, in percent. I can practically guarantee you that your actual federal bracket will not match any of the statutory tax rates (10%, 15%, 25%, etc.). If you closely compare your Form 1040 for Step 3 and Step 1, you will see exactly where the phaseouts or AMT have nailed you.