April 15 is Tax Day. Last year, the IRS pushed the deadline back two months due to the. Even though that's not the case this year, millions must now take into account as well as amid an uprooted US economy.
There areavailable and you can also see how much you'd get by calculating your refund.
1. Consider if you're going to get a refund at all
Nearly three in four tax return filers in the US will receive a refund, which puts you in good company with millions of other people. The rest of us will owe the government money.
Generally, your refund is calculated by how much money is withheld for federal income tax, minus your total federal income tax for the year. (-- more on that below.) Remember that the withheld from your paycheck don't always go to federal income tax. You also pay into Social Security, Medicare and depending on where you live, state income tax.
If you received a modest refund last year -- or actually owed money -- you may need to adjust your withholding to help offset what you'll need to pay come tax time. Otherwise, you'll get stuck with a larger bill when taxes are due. (There's also a chance your tax bracket may change; if you earned more, you could owe more, too.)
You can use the Tax Withholding Estimator from the IRS to make sure you have the correct amount of money withheld from your paychecks, whether they are weekly, biweekly or monthly. It's good to have a recent pay stub and tax returns on hand to get the most accurate information when using the estimator before filing your tax return. Keep in mind that it works for most filers, but not necessarily for every filer. Every family situation, gross income, exemptions, withholdings and other factors can completely change how much you receive -- or owe -- come tax time.
2. Gather your necessary documents
Before you start your math, you'll need a few different items for your calculations, including:
- Personal details: Your age, filing status (single, married filing jointly, married filing separately, head of household), if you have any dependents and if so, how many and their ages.
- Earnings information: Your pretax income, retirement plan contributions, how much you claim in deductions, and taxes you've already paid or had withheld so far this year. Some popular deductions include the child tax credit, student loan interest deductions and the home office deduction.
- Business expenses: If you work out of your home or have paid for work-related items, you might be able to claim it on your taxes or claim exemptions. Keep in mind that if you are a business owner, business taxes are filed separately or you'll need to account for that income on your personal return. Be sure to read up on what expenses qualify before filing with itemized business expenses.
- Other details: Consider things like medical expenses, donations, interest on your mortgage, student loan interest payments, childcare costs and more. You might also consider that your income puts you in a new tax bracket, which can change how much you get as a refund (and possibly owe money).
Without this information, you might not be able to accurately calculate your 2020 tax refund.
3. Find a reputable tax refund calculator
Major tax software companies offer tax return estimators and calculators to help you determine how much you can expect to get back as a tax refund. Find calculators from:
While the specifics of each calculator varies, they all require much of the same information. Make sure you have all your necessary documents before starting your calculations. If you don't, it might take you longer to compute your refund, or you might not get an accurate calculation.
When possible, it's best to prepare your taxes as early as possible. Delaying the inevitable can cause you stress -- and it also gives fraudsters more time to. Technically, you can start filing as soon as you receive your W-2s from your employer. This usually happens around the end of January, but varies depending on your employer.
Once you've gathered the necessary documents, you're nearly set to file. And the sooner you file, the sooner you get your refund. Also, keep in mind that you will usually receive a refund more quickly if you set up direct deposit. Don't waste time -- file as soon as you can so you can join millions of other Americans who are expecting a return.
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