Tax Refunds: How Do They Work?
The best part about filing your taxes is getting the tax refund check! Chances are, you have been paying your taxes directly, or your employer has been withholding tax dollars from your paychecks. Many individuals overpay on their taxes, so they quickly file their taxes to get their tax refunds and soon as possible.
How do tax refunds work?
Your employer withholds some of money from your paycheck, based on a formula and the information you provided on your W4 when you got hired. This withheld amount is applied towards your tax payment to the IRS.
Because the formula is only based on the allowances you showed on your W4 and of your paycheck, it doesn’t take other factors of your life into consideration. For example, hospital expenses, tuition payments, and childcare expenses aren’t considered.
When you file your taxes, you have the opportunity to claim these expenses as deductions. A deduction reduces your overall income. Therefore, you owe less in taxes and are qualified for tax refunds.
Because you pay taxes to both the federal government and to the state, you might receive two tax refunds. The amount will depend on how much you have overpaid throughout the year. To make sure you receive both tax refunds, you will have to file your taxes with both the federal government and the state government.
How do I get my tax refunds?
To get your tax refunds, you have to file your tax returns. You can do this on your own or by hiring a tax accountant or specialist. You must also make the deadline, which is usually in April, or file for an extension. You can find more information on these topics at the IRS website.
Most individuals opt to file taxes on their own to save from having to pay professional fees to tax specialists. Thanks to the Internet, almost anyone can easily file their taxes online! There are many software and program choices available online.
You will need your W2’s or 1099’s, and other documents to file your taxes. Once you have these documents, you can use online tax filing programs to plug in your information. Tax filing programs are easy to use, with clear instructions and instant help. The program will guide you through each step, and will even help you find deductions to maximize your deductions and refund checks!
Where do I get my tax refunds?
You will usually receive your tax refund checks in the mail within three weeks. When you file your taxes online, you can also choose to have your tax refunds directly deposited into your bank account. All you need is your bank account and routing numbers, which you can easily locate at the bottom of your personal check. When you choose the direct deposit option, you’ll receive your check in half the time.
The most important thing to remember about tax refunds is that you have to file to receive them. So save all your receipts and documents for deductions, and get your tax returns in by April –your money is waiting!