Fun Fact - You can only burn so much fat each day
According to an article in the March 2005 Journal of Theoretical Biology, one pound of stored body fat is only capable of generating 31.4 calories of energy per day.
Why does this matter?
To lose weight you have to burn more calories than you consume, but going overboard on cutting calories does not necessarily mean you are going to shed more fat. If every pound of fat in your body can only release 31.4 calories per day, this means that if you are dieting to lose that excess 20 pounds, you can only receive 624 calories per day from the release of fat.
What if you are cutting 1000 calories a day? Where does your body get the rest of the fuel it needs? From protein. If your body is coming up short on the calories it needs to survive, it will get them by consuming your muscles and organs. The goal from dieting is to lose fat, not muscle, so extreme calorie restrictions each day are actually counter productive. Remember, muscle is the engine that burns all those calories, so losing muscle reduces your ability to burn fat. While it would be nice if massive calorie deficits resulted in massive fat loss, unless your obese, it unfortunately doesn't work that way.
How can I tell how much body fat I have?
There are plenty of ways to determine your body fat percentage. Most are quite inaccurate and the ones that are accurate are complicated and/or expensive. Ultimately it doesn't matter. In my experience, most people know the amount of fat they want to lose. Use this estimate as your guide to see how much of a calorie deficit you can safely run each day.
If you want more information on how to calculate body fat and some good example images of different body fat percentages, check out www.leighpeele.com.