Ever ask yourself: how do I calculate my tax refund?
If you’re wondering how much the IRS owes you, it’s best to start collecting information—particularly on what you’ve made (income), what you’ve paid (taxes) and how many tax-saving deductions you qualify for over the last tax year.
How to Calculate My Tax Refund
Knowing how to calculate my tax refund and become a better refund estimator in 2019 starts by locating:
1. Records of Income and Tax Paid
Calculating your tax refund starts by knowing what you’ve earned and how many federal taxes you’ve paid during the year.
With accurate records of your personal income, you can begin to understand where you fall within the 2019 tax brackets—and how much of your earnings qualify as taxable income.
Generally, what you’ve made over the year will come from one of two sources, including:
If you were employed over the past year, chances are good you received a W-2—the employer form outlining your total earnings and federal taxes paid during the year. If you worked for multiple employers or switched jobs at any point in that time, you probably received more than one.
There are a number of income sources outside of employment that are subject to federal income tax. And though each source is taxed at a unique rate, the sum total of your additional income will affect the size of your refund.
Other income can include money made from:
- Capital investments (short- and long-term capital gains)
- Stock/qualified dividends
- Interest/non-stock dividends
- Social security
- IRA and pensions
- Pass-through businesses
- And more
When wondering how to calculate my refund, tallying up what I’ve earned in 2019 is an important first step. But understanding the tax savings you’re eligible for, and how to minimize your taxable income, is key to maximizing what you get back through IRS direct pay.
2. Deductions, Credits and Estimated Tax Payments
Items like tax credits, deductions and adjustments can often be used to reduce your taxable income. Once factored in, such tax savings may even land you a lower spot in the 2019 tax brackets, reducing your tax rate and increasing your IRS direct pay refund in the process.
Such elements as student loan interest and alimony you’ve paid may help ease your federal tax burden, while IRA contributions may also help take some of the sting out of this year’s bill.
And itemized deductions like medical expenses, personal property tax, real estate taxes, mortgage interest and charitable gifts—as well as certain child care and education expenses—can also nudge your tax refund into the black.
As you prepare to estimate your 2019 refund—and lower your position in the 2019 tax brackets—be sure you’ve got records of all deductible expenses needed to reduce what you owe and maximize what you get back.
3. 2019’s Top Refund Estimator
The short answer to “how to calculate my tax refund?” That would be the Liberty Tax® refund estimator—the best and fastest way to calculate your 2019 taxes and know what the IRS owes you.
And the sooner you’ve estimated your federal refund, the faster you can get your money back through the IRS direct pay option, which makes it easier than ever to get the funds you deserve.
Use our free income tax calculator today to see what you’re owed and get your IRS refund back fast!