How do you calculate your tax refund?


Quick Answer

To calculate your tax refund, list all income items, subtract all deductions, apply the appropriate tax rate, and then determine if the amount already paid or withheld is greater than the amount owed, notes Rick Suttle for the Houston Chronicle. If the amount already paid or withheld is greater than the amount owed, the taxpayer is entitled to a refund.

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Full Answer

Taxpayers can calculate total income by considering all items from Form W-2 or Form 1099, explains Suttle. Homeowners receive specific items related to deductions from their mortgage company. Taxpayers can then take the itemized deduction or the regular standard deduction. The standard deduction varies based on the taxpayer's filing status. Subtract the deductions from total income to arrive at taxable income, and then utilize a tax table to find the appropriate tax rate.

Intuit TurboTax offers an online tax calculator to assist in calculating a tax refund. This calculator contains a basic questionnaire related to personal information, income and expense items. More detailed calculators offered through TurboTax assist in calculating all benefits, dependents and deductions. Taxpayers must note the total tax withheld, which is listed on a W-2 wage statement, and then compare this figure to the amount calculated on the income tax calculator. The difference between these two figures determines if tax is owed or a refund is due.

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