It can be beneficial to have a rough estimate of your state tax refund status before you file. Luckily, this amount is fairly easy to calculate even before you pick up your tax forms.
Calculate Your Income
If you’ve managed to save your pay stubs throughout the year, you can add up how much you earned over the year. Similarly, you can calculate exactly how much was taken out for state taxes. This information is also on your pay stub and is required for figuring out your state tax refund status.
If you haven’t saved pay stubs, simply wait for your form W-2 to arrive in the mail from your employer.
Determine Your Tax Bracket
After calculating your wages earned for the year, you need to figure out which tax bracket you fall into. The state tax brackets are readily available online. Make sure you check as they are all drastically different and can affect your tax refund status.
Also, many states have different allowances you can take advantage of. For instance, Michigan gives you a tax credit if your child was stillborn. Make sure to look into what your state offers for the best state tax refund status possible.
Calculate Whether You Over or Underpaid
Now, the next step is to add up the taxes withheld from your paycheck for state taxes. Find how much you were supposed to be charged, which was the tax rate you looked up previously. Subtract that number from the taxes actually withheld. Now you’ve got an idea of what your state refund status will be!
Check Your Facts
Again, this number is only a rough estimate of your refund status. Careful consideration should be taken when filling out your taxes. If you’d rather not do it yourself, there are plenty of websites that have tax calculators you can use. Most are free.
The major tax service providers have free calculators in hopes you’ll use their services. To get a better return on your state tax refund status, you may sign up with a major service. They can be helpful as they can help you determine whether you qualify for the state tax breaks previously mentioned.