Tips On How You Can Calculate Your Tax Refund Before You Even File The Paperwork

LAST UPDATED: FEBRUARY 03, 2020
What Information Does The Tax Refund Calculator Need?
  1. Basic information like age and marital status.
  2. You will need information regarding your pay stubs. That can be gathered from forms like the W-2, W-4, and the 1099 Misc. The last one is for those who are self-employed.
  3. You will need to enter information regarding your income and amounts that you are withholding.
  4. You might have worked multiple jobs during the previous year. You will have to enter the information on separate forms. The reason is that some of the paychecks you earned could have placed you into a bigger tax bracket.

After you do that the system will bounce back with a rough idea of what you owe and the amount of your refund. Keep in mind that this is a rough estimate. The actual figures might vary.

Do You Want A More In-Depth Look

You can do that too. You will have to provide more details. Keep in mind that you are not filing your taxes until you start the process. Once again, this is just to give you a rough idea of what to expect.

1) You will have to provide information on things like deductibles and whether or not you own or rent a home. You will also have to mention whether or not you have children and investments other than the house, car, or job.

The other thing to remember regards the information you provide. The system can only be as honest as the information you give. Your numbers are going to be different if you fabricate or omit information.

Small Refunds and More Taxes

There is a misconception that if you get a smaller refund you are paying more taxes. The amount of taxes you pay every year is related to the money withheld from your paychecks. It could also mean that you made more money than the previous year.

A big refund usually means that you paid too much in taxes during the year. The IRS is returning that money to you.

FYI: A lot of tax experts encourage their clients to try to pay a little or break-even for the year. Ending up with a $0 refund is a good thing because it means you optimized and maximize your earnings.

In other words, getting back a big refund each year is not necessarily a good thing.

Conclusion

Getting a rough idea of what you will get back in taxes is very beneficial for the reasons listed above. It will help to minimize stress and give you more peace of mind.