We as humans have an incredibly finite amount of willpower. That’s not a slight against you - that’s just human psychology. Here’s a hard truth: If you had that money, you probably would have spent it. I think we can hold off on our plans to dump a bunch of tea in Boston Harbor. I think we can agree the government is “stealing” the equivalent of a latte each month from you. How much interest did you lose through your tax withholdings? $3.62 a month. Let’s assume that money would have been sitting in a savings account with a 1.45% APY (that’s on the higher end for savings accounts). Then these “experts” are typically out of breath because of their own brilliance. TRANSLATION: If you get a refund, that means the government took your money and earned interest on it for an entire year! “If you’re getting a tax refund, you’re giving the government free money!” One of their favorite go-to buzz phrases: Because 99.99% of the time they are DEAD WRONG about money. I have a confession to make: I actually love the kooky financial “experts” you see on TV or on their online soapbox who lecture you about taxes. Now, let’s get into what you might be getting WRONG about your tax refund. So now you know roughly how much you’re getting back and how to get your money. When you get your money back, be sure to put it to good use! It’s secure, fast, and the same way the government deposits millions of Social Security and Veteran Affairs benefits each year. There you can elect to receive your refund through direct deposit (a free service provided by the IRS). You receive your tax refund even faster when you file it electronically via platforms like TurboTax or IRS e-file. There is another route though: Electronic tax filings. In fact, you’re going to have to wait four to six weeks before you’re even able to check your status on their “Where’s my refund?” tool. If you decide to file your taxes through good old fashioned pen and paper, it’s going to take considerably longer to get your refund back. Ultimately, though, how soon you get your refund back depends on two things: And according to the IRS, they issue nine out of ten refunds back to the taxpayer within 21 days after they file their taxes. In fact, you can check out the IRS’s “ Where’s my refund? ” tool to find the status of your tax refund right now. Luckily for you, the IRS is excellent about getting your tax refund to you. Last year, he made $75,000, withheld $15,000, and collected no government benefits.Ĭheck out how much he could get for his 2023 tax refunds (using the calculator above ). John is a single 30-year-old with no dependents. Tax Refund Calculator: How much will John ($75,000 / No kids) get back in taxes? Let’s take a look at this using two more VERY simplistic examples. But it can give you a rough idea of how much you might get back from the IRS come tax season. This is a very simple breakdown of how tax refunds are calculated and doesn’t take into account things like tax deductions, exemptions, and benefits claimed throughout the year. See if that’s more or less than what you’ve had withheld (look on your end-of-year W2 form).Īmount withheld – Your tax obligation = Refund.Find your total income tax owed for the year (I suggest using this tax calculator for a rough estimate ).To get a rough estimate of how much you’ll get back, then, you need to: This form determines how much you and your employer agree to withhold for taxes. Part of the reason it’s missing (aside from your 401(k), insurance, etc.) is because the government is “withholding” your pay based on how you filled out IRS form W4. Now you’ve probably noticed that a large portion of your income is “missing” from your paycheck each month. To understand how much you might get back in taxes for the year, you need a quick lesson in withholdings.
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