Tax Reduction: Paycheck Withholding and Your Tax Refund
As of May 2016, more than 102 million people--almost 75% of all Americans--got a tax refund check. The average refund amount was nearly $3,000. That means that every month these taxpayers paid an average of $250 too much in income taxes!
Are you paying too much? Your employer might be withholding too much in taxes from your paycheck.
Do You Expect a Tax Refund Next Tax Season?
If so, why wait until then if you could get this refund money now? Here is what you need to do to start getting your refund money with your next paycheck:
- Simply use this calculator to estimate your withholding allowances and see if you are taking out too much in taxes: Start Withholding Calculator
- If you find that your tax withholding is too high, contact your employer and have your W-4 form updated. Once this is done you will get your "refund" in advance and you could have this money in your hands with your next paycheck.
Remember, a tax refund is basically the repayment of an interest-free loan you made to the government. Shouldn't you have access to this money now?
Tax Tip: You might want to give yourself a small cushion on your W-4 so you don't end up owing taxes next tax season.
An overview of paycheck withholding adjustments
Plan to Save: Estimate Your Taxes and Tax Refund
Start the Free 2016 Tax Calculator