A person filling out tax forms
Source: Pexels

How To Calculate How Much You’ll Get Back on Taxes


Feb. 4 2022, Published 3:58 a.m. ET

Every year, millions of Americans receive a tax refund from the IRS. For the 2020 tax filing season, the IRS issued $736.2 billion in refunds to taxpayers, with the average refund being $2,827. If you want to determine how much you’ll get back on taxes this year, both TurboTax and H&R Block offer free refund calculators.

Article continues below advertisement

To find out what you’ll need to estimate what your tax refund will be and the available tax credits you might qualify for, read on.

How to calculate how much you’ll get back on taxes

calculate tax refund
Source: Pexels

There are several tax refund calculators available on the internet, but it’s best to stick with a reputable source to get a more accurate figure. We looked over TurboTax’s free tax refund calculator to find out exactly what information you’ll need to estimate how much you’ll get back on taxes.

Article continues below advertisement

Before you begin using a free tax calculator, be sure to gather the following information:

  • Your W-2s, 1099s, or any other tax forms you have that indicate how much you’ve earned this year.
  • The amount you earned outside your place of employment. If you sold cryptocurrency or sold goods via PayPal or eBay, be sure to have the tax forms you received from these companies handy.
  • The dependents you intend on claiming.
  • How much you collected in unemployment, if applicable.
  • A record of your childcare expenses for kids under 13.
  • The total amount you received in COVID-19-related stimulus payments.
  • The amount you contributed to a retirement plan or IRA, or received in alimony or Social Security benefits.
Article continues below advertisement
  • Any monetary donations you made for the tax filing year.
  • The amount you paid in tuition or student loan interest, if applicable.
  • The amount paid in mortgage interest or property taxes.

Additionally, you’ll need to know what filing status you plan on using, whether it's single, married, legally separated, married filing jointly, or married filing separately. If you’re married, you may want to file a joint return with your spouse for more tax incentives and, possibly, a larger refund.

Article continues below advertisement

Once you have all the information listed above, you can visit TurboTax’s website and input it into the tax refund calculator. Now, because you won’t be delving too much into your tax situation, the figure you’re given is only an estimate for how much you’ll get back on taxes. To determine the exact amount of your tax refund, you’ll need to file your taxes.

Tax credits and deductions that can make your tax refund larger

Although tax refund calculators act as a resourceful tool that can estimate how much you’ll get back on taxes, they don’t account for the various credits and deductions you can claim. If you want to be sure you’re getting the maximum refund, don’t forget to apply these credits to your return, given you qualify for them.

Article continues below advertisement

The expanded Child Tax Credit (CTC)

The American Rescue Plan increased the child tax credit from $2,000 to $3,000 for dependents 17 years of age and younger. Any dependents you claim under the age of 6 qualify for a $3,600 child tax credit (CTC). If you didn’t collect half of your CTC in 2021 or you had a child, you’re entitled to the full credit when you file your taxes.

If you did collect half of the expanded CTC in 2021, you’ll only be entitled to collect the remaining half, which may either be $1,800 or $1,500. You should be aware that the expanded CTC phases out for individuals who earned $95,000 or more, and couples who made $170,000 or higher.

Article continues below advertisement
Source: Twitter

Tax credits for sick and family leave (applies to the self-employed)

If you’re self-employed and had to take time off to care for yourself or your child, you might be entitled to a tax credit for the days you took off. To claim this credit, you’ll want to visit the IRS website, which provides guidelines and eligibility criteria. The IRS will only pay for days taken off between April 1, 2021, and Sept. 30, 2021.

Article continues below advertisement

The IRS says you may be entitled to the lesser of $511 per day or 100 percent of the average daily self-employment income if you had to take time off to care for yourself due to COVID-19 concerns. If you had to take time off to care for a child or qualifying individual, you may be entitled to a credit of $200 per day or 67 percent of the average daily self-employment income, whichever is less.

If you decide to file your taxes using a tax preparation company, you should be guided through all the deductions and credits to ensure those you qualify for are applied to your return.


Latest Personal Finance News and Updates

    Market Realist Logo

    © Copyright 2022 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.