How to Estimate Your Tax Refund

It is possible to estimate your tax refund or the amount that you might owe before getting your tax documents from employers. Doing so helps you budget for expected payments or make plans for your refund. There are a few options to help you compute your estimate accurately.CalculatorTax

Online Tax Estimating Software

Nearly every online tax preparation service has a refund estimate tool available. If you have filed online with a specific service for multiple tax years, the information from previous returns is likely saved in the system. This information will help you complete the refund estimate quicker.

Use the Website

The IRS website is the most secure option for completing a tax refund estimate. A tool is available directly on their website and will use information from recent pay stubs and last year’s tax return. The tool will let you know if you will owe or obtain a refund with approximate amounts.

Complete a Test 1040 Form

You can take the old way and complete a test 1040 form. This can be printed from the website. It will give you an idea of what your estimated refund or payment would be based upon last year’s return, if your wages have not fluctuated much.

Estimating your tax refund is not necessary, but is helpful for those that have struggled with finances. It is also helpful for families that wish to plan a special vacation or major purchase. You can make changes to your withholdings from income if it does not appear that your refund will be what it needs to be.

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