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How Do I Calculate My Income Tax Refund?

 

Every year, millions of people in your country have to file their tax returns. This is a stressful time for many people, especially if they aren’t sure if they’re going to get a refund or not. Some people rely on having a refund each year to help them cover important annual expenses or major purchases. Yet, it can be frustrating to wait around to find out how much you can expect to get back. There are ways that you can estimate how much you’ll be getting back in your income tax refund, however; you’ll just need to gather some important data to figure this out.

How Much Money Did You Earn?

Before you can understand how much you’ll be getting back from the government, you need to find out how much you earned throughout the year. If the year has not ended yet, you’ll certainly need to factor this into your calculation as well. Start by gathering any paystubs from your regular job, as well as any other side work you’ve performed. If you have a spouse who will be filling with you jointly, you’ll need to gather the same information for them. From here, you’ll have a good understanding of how much money you have earned in total, but be sure to gather your gross income before taxes were deducted. If you had any pre-tax deductions from your paychecks, those could be reduced from the total.

How Much Have You Paid In Taxes?

Next you’ll need to find out how much money you have already paid to the government. If you live in the United States, you’ll need to separate federal taxes and state taxes and keep these numbers separate. There are some numbers which may appear to be taxes, such as Social Security payments, which should not be included in this calculation. Although these are taxes, they will not affect your gross income or your tax refund.

Determine Your Tax Bracket

It’s important to start by estimating how much money you have earned so that you can accurately understand what tax bracket you will fall into. Things can become complicated here if you have dependents, run your own business, own property, or have other deductions, so be sure to factor all of these things in while you determine your tax bracket. The tax bracket you fall into will be correlated directly with a state and federal tax percentage. That percentage is the portion of your gross earnings that you must pay for the previous calendar year. The difference between this number and the amount you’ve already paid will be your tax refund. 

 

 

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