How to Calculate a Rough Estimate of Your Federal Tax Refund Status
Wouldn’t it be nice to know how much you are going to get from the IRS come tax time? It would certainly help when figuring out your money situation for the next year. It also beats worrying about your federal tax refund status during the countdown to April.
Well, you can stop worrying! There is in fact a way to figure out a rough estimate of what your refund status is. All well before the April showers begin.
Calculate Your Income
As soon as your W2s arrive in the mail from your employers, you can begin the process. Though, if you managed to keep an accurate account of all your money received through the year, you don’t even need your W-2s. For the rest of us, calculating your tax refund status starts when you have all the appropriate info from your company.
Determine Your Tax Bracket
When you have how much you made, you can figure out which federal tax bracket you belong in. There are many calculators available online for this. Make sure you enter if you’re single or married and filing jointly. Filing jointly can give you a big tax break, so enter it correctly. Another big factor on your final IRS refund status is the number of dependents you have.
Find Your Deductions
Now, do you have your deductions all figured out? Getting all this information is necessary to get a good rough estimate for your federal tax refund status. Did you make any contributions to charity during the year? Did you pay on student loan interest? Or how about sizable child care costs? All of these can affect your refund status. Make sure to factor them in.
Account for Tax Credits
You may also be eligible for tax credits. These could lower how much taxes you owed during the year, meaning the federal tax refund status could be much larger.
Now, simply take how much you owed in taxes and subtract it from how much you actually paid. The difference is your tax refund status!
If you’d rather not do the math, there are several websites you can visit that will estimate your refund status for you. In fact, most of the major tax service providers have a free tax refund status calculator you can use. Then, if you like what it says, you can sign up for their paid service to do your taxes then and there.
Keep in mind this is only a rough estimate. Careful care must be taken to figure out your federal tax refund status during tax season. However, this gives you a chance to plan ahead on finances.