How to Track Your Tax Refund Photo credit: © iStock/DNY59 Doing your taxes through a tax software or an accountant will ultimately be the only way to see your true tax refund and liability. Using these calculators should provide a close estimate of your expected refund or liability, but it may vary a bit from what you ultimately pay or receive. You can also use our free income tax calculator to figure out your total tax liability. For example, you might've decided to itemize your deductions rather than taking the standard deduction, or you could've adjusted the tax withholding for your paychecks at some point during the year. If your income changes or you change something about the way you do your taxes, it’s a good idea to take another look at our tax return calculator. In other words, you might get different results for the 2022 tax year than you did for 2021. Because tax rules change from year to year, your tax refund might change even if your salary and deductions don’t change. Our tax return calculator will estimate your refund and account for which credits are refundable and which are nonrefundable. Understanding Your Tax Refund Results Photo credit: © iStock/DNY59 Our tax return calculator will take all of this into account when figuring out what you can expect at tax time. By contrast, some tax credits are nonrefundable, which means they have the power to reduce your tax liability down to zero but can’t be refunded to you if they exceed your liability. Refundable tax credits go into your tax refund if they exceed what you owe. What if you’re eligible for tax credits that are greater than what you owe – say, $1,000 in tax credits with a $500 liability? Whether you get that $500 difference refunded to you will depend on whether the tax credits you qualify are refundable or not. So, if you owe $1,000 but qualify for a $500 tax credit, your tax bill goes down to $500. A tax credit is a dollar-for-dollar discount on your tax bill. Remember that a tax deduction reduces your taxable income, cutting your tax bill indirectly by reducing the income that's subject to a marginal tax rate. A tax return calculator takes all this into account to show you whether you can expect a refund or not, and give you an estimate of how much to expect. You might also qualify for so many tax deductions and tax credits that you eliminate your tax liability and are eligible for a refund. You might have overpaid your estimated taxes or had too much withheld from your paycheck at work. Why would the IRS owe you a tax refund? There are several possible scenarios. SmartAsset's tax return estimator can help you figure out how much money could be coming your way, or how much you’re likely to owe. However, if you owe the IRS, you’ll have a bill to pay. If the IRS owes you money it will come in the form of a tax refund. You can learn that you owe the IRS money, that the IRS owes you money or that you’re about even, having paid the right amount in taxes throughout the year. How to Calculate Your Tax RefundĮvery year when you file your income taxes, three things can happen. To find a financial advisor who serves your area, try our free online matching tool. If you want to estimate how big your refund will be this year, you’ll be well served by our free tax return calculator.Ī financial advisor can help you understand how taxes fit into your overall financial goals. Many Americans depend on their tax refund as an important part of their annual budget. Whether you save it for retirement, use it to pay down credit card debt or spend it immediately, a tax refund can be a great financial boost. Tax Return Estimator Photo credit: © iStock/DNY59
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