The electronic structures, spin-states, and geometrical parameters of tetra-, penta-, and hexa-coordinated iron-porphyrins are investigated applying density functional theory (DFT) based calculations, utilizing the plane-wave pseudopotential as well as localized basis set approaches. The splitting of the spin multiplet energies are investigated applying various functionals including recently developed hybrid meta-GGA (M06 family) functionals. Almost all of the hybrid functionals accurately reproduce the experimental ground state spins of the investigated Fe-porphyrins. However, the energetic ordering of the spin-states and the energies between them are still an issue. The widely used B3LYP provides consistent results for all chosen systems. The GGA+U functionals are found to be equally competent. After assessing the performance of various functionals in spin-state calculations, the potential energy surfaces of the oxygen binding process by heme is investigated. This reveals a “double spin-crossover” feature for the lowest energy reaction path that is consistent with previous CASPT2 calculations but predicting a lowest energy singlet state. The calculations have hence captured the spin-crossover as well as spin-flip processes. These are driven by the intra-atomic orbital polarization on the central metal atom due to the atomic and orbitals rearrangements. The nature of the chemical bonding and a molecular orbital analysis are also performed for the geometrically simple but electronic structurally complicated system tetra-coordinated planar Fe porphyrin in comparison to the penta-coordinated systems. This analysis explains the observed paradoxical appearance of certain peaks in the local density of states (DOS).