Estimating your tax return and refund is actually easier than most think. Even though we still have time till the 2020 tax season starts, you can calculate your tax refund before you file your taxes.
Generally, tax refund is calculated by how much taxes are withheld from your paycheck. If you’re single and claimed 0 allowances on your W-2 Wage and Tax Statement Form, it means more taxes will be withheld from your pay compared to someone who claimed one or two allowances. This will inevitably increase your chances of receiving a tax refund.
Find out if you’re eligible for tax refund
If you keep a record of your paychecks, you can add up all the taxes and come up with a round figure. From there on, all you need to do is calculating your taxable income. First off, you need to subtract all the deductions you can claim from your income and find your adjusted gross income.
As always, you should take the standard deduction if your itemized deductions don’t exceed the standard deduction amount. For taxes filed in 2020, the standard deduction amount is $12,400.
By clicking the link below, you can see the tax brackets for single, married filing jointly and separately, and head of households.
Also, you need to find if you’re eligible for any tax credit which will be a key factor in determining your eligibility for a tax refund.
Now that you know the amount of taxes you need to pay, it all comes down to how much taxes were withheld from your paycheck. If the amount you’ve got exceeds tax liability, you will receive a tax refund.
Once you file your taxes, you will have your refund amount. To track the status of your tax refund, you can use the IRS’ Where’s my Refund tool. To learn how to track your refund status, visit this article.