What Will Your Tax Refund Look Like This Year?

by Jason Unger

Now that we’re in 2010, tax time is around the corner.

While there aren’t too many people who actually like to pay taxes, everyone likes to see if they’ll be getting a big (or any) refund come April 15.

As employers prepare to send out W2s and 1099 statements, you can get a peek at what your refund will be this year.

If you’ve got a copy of your latest paycheck, have a general idea of your investment income and your savings interest, you can use a number of online tools to estimate your tax bill and refund.

Generally, you’ll need to know:

  • total income (paychecks, investments and interest earned)
  • federal taxes paid
  • if you itemize, how much you can deduct
  • your home and family situation

To check out my tax bill, I used TurboTax’s TaxCaster Calculator.

It’s an easy and intuitive way to figure out if you’ll be getting a refund, and how much it will be.

But that’s not all. If you’ll be getting a refund, now’s the time to adjust your withholdings and stop loaning the government money for free.

Using the IRS Withholding Calculator, input your expected 2010 income, adjustments and any tax-deferred accounts. You can then enter your deductions, whether you itemize or plan to take the standard.

The calculator will then tell you exactly how many withholdings you should claim on your W-4. By adjusting your W-4, you’ll minimize the amount you lend to the government, while not getting hit with a huge tax bill come next April 15.

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