How to Figure Out How Much You're Getting Back on Your Taxes
- 1). Add up all of your taxable income from your various sources. Each of your employers should send you a document showing your taxable income; as well as how much, if any, income was withheld from your paycheck for estimated taxes. If you are an employee, you should receive a W-2. Independent contractors should receive a 1099, and interest payments made to you during the year will be documented with a 1099-INT.
- 2). Subtract the value of any deductions that you are entitled to reduce your taxable income. When checking your eligibility, make sure you qualify based on your filing status and adjusted gross income. Also check to see whether the deduction is an above-the-line deduction, meaning you can take it on top of the standard deduction, or an itemized deduction, which means you must give up the standard deduction to take it.
- 3). Calculate your tax bill based on the tax rates for the year. Your tax rates will vary based on your income level and your filing status. For example, in 2010, if you have $41,000 of taxable income and your filing status is single, your tax bill would be $10,250. However, if your filing status is married filing jointly, your tax bill would only be $6,150.
- 4). Subtract any tax credits from your tax total that you are eligible to take. Unlike deductions, which reduce your taxable income, tax credits reduce the amount of tax you owe. The remainder will be your total tax bill.
- 5). Subtract the amount of taxes you have had withheld and estimated payments you have made during the year. If the result is a negative amount, that is the amount you will be getting back on your taxes. For example, if your tax bill was $4,900 but you had $5,600 withheld during the year, you would be entitled to a refund of $700 when you filed your tax return.