One of the biggest questions people ask after filing tax returns is this: “How much will I get back in taxes?” Contrary to popular belief, the IRS doesn’t keep more than your tax liability and does return the extra. Here are a few basics that will help you determine what you might get back for this year.
How Much Will I Get Back in Taxes? | Get Estimates
Will I Get a Refund This Year?
To answer the question, “How much will I get back in taxes?” let’s look into how you generate an income tax.
Calculating the tax refund can sometimes get complicated. Everyone has a different income and possible tax deductions. Most people have employers who hold a certain amount of money each paycheck for federal and state income taxes. The IRS calls this “withholding.”
Your employer bases the amount withheld from your paychecks on a rough guess of your tax liability. The total counts when you file your taxes. If you put in more than you owe, you will get a refund. The IRS tax refund calculator may help you figure out your possible refund.
How Do I Know How Much I Paid in Taxes?
To know how much you have withheld from your pay, take a look at your paystub. You will see certain amounts for federal taxes and state taxes. If your income does not change from month to month, you can multiply the amount withheld by the number of paychecks you get in a year to get the total.
People who want a smaller tax refund can request to have less money withheld. If you worry you may have to owe money, you can ask to have more money taken out. Try a 2018 tax calculator to get more information.
What Are the Common Tax Deductions and Tax Credits?
In the US tax system, there are many tax deductions and tax credits you might be able to claim. This reduces your taxable income, which can lower the amount you pay. Everyone who files taxes can claim the standard deduction up to $24,000.
If you have children living at home, you may qualify to claim the child tax credit up to $2,000 per child. People with student loans can often claim $2,500 of their interest payments per year. Your tax professional can help you identify more deductions and credits that may work for your tax situation.
What Is My Tax Bracket?
Once all your tax credits and deductions are complete, you have your taxable income. You multiply this sum by your tax brackets. These are ranges of income and their corresponding tax levels. For example, a person who has a taxable income of $50,000 for 2018 will pay 12 percent on that income.
The tax brackets changed for 2018, so you may need a 2018 tax refund calculator to estimate it. Look at your local state tax calculator to see how your state tax laws may have changed.
How Much Will I Get Back in Taxes?
At the end of this process, all you have to do is compare the amount you owe to the money withheld throughout the year. Do you pay estimated taxes for a business? You can add them up and balance them with your tax liability. If you paid more, you likely qualify for a tax refund. People who paid less over the year may owe some money.
When Will I Receive My Tax Refund?
You can usually begin filing your taxes each year around the end of January. The deadline falls in mid-April. If you will receive a tax refund, filing your taxes earlier means you get that money back sooner. You can check your refund status on the IRS website. It can take a few weeks or more if you requested your refund as a check.
Do you ever wonder, “How much will I get back in taxes?” If you want to get a bigger amount, you may want to check your deductions again. This video from The Melea Show will tell you some items you may have missed:
“How much will I get back in taxes?” There’s no definite answer to that, but your guess also doesn’t have to be far out. With the information above, and by using tools like a Turbo Tax calculator, you will have a better idea. Your estimate can then help you get a leg up on your financial planning.
What’s the biggest tax refund you ever received? What did you do with it? Share your stories in the comments below.
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