If you’re an adult then you probably make financial decisions every day. Financial decisions aren’t limited to large things like whether to purchase a home or continue renting, whether to invest in stocks or bonds, whether to move your CD into a money market account.
Financial decisions are also the little things that affect your daily life. Do you choose to spend your money on $4 cups of coffee? Do you pack your own lunch? Do you fly or drive for your family vacation? How much do you set aside for things in your budget? Do you keep a budget? Knowing what’s ahead is important for even the little things. That’s why people like to estimate their tax return.
Why Would You Want to Estimate Your Tax Return?
Isn’t calculating your income taxes once a year enough? Why would you want to do it ahead of time, only for an estimate? Because of those everyday financial decisions. Because you’re an adult and you want to know what’s in store for you come tax time.
So you use a tax return calculator to find out how much you’re going to owe the IRS. Or, if you’re lucky, your tax calculator will show that you’re getting a refund. Good to know.
How Does One Go About Estimating a Tax Return?
Sometimes tax return calculators are called tax refund calculators. That’s because people who use them are usually doing so in order to find out how much of an IRS refund they’re getting, not whether they’re getting a refund. Usually people have that money earmarked already so they’re trying to estimate how much they’ll get so they can pre-spend it. That’s not advisable…prespending that is. Estimate your tax return for budgeting purposes but definitely don’t spend it before you get it. You may not get it in time for the credit card bill on which you a pre-spent your refund. There is no guarantee, you know, on the timing of an IRS refund.
How to Find a Tax Estimator
There are plenty online. Most of the major tax prep companies like TurboTax or efile have some sort of software that lets you estimate your tax return. It’s usually free and in return you give them your email so they can send you enticements to use their company to do your taxes for real when the time comes.
It’ll be just like actually doing your taxes for real: enter your basic information like how many allowances, exemptions, children, annual salary, etc. It will be an interview format just like their tax preparation software. Most companies now offer an online income tax return preparation service that’s basic and free. Even H&R Block, which has offices all over the country, has an online version of their tax prep services. And you can do an estimate tax return on most of them. Just pick your company wisely, go for name brands you can trust, so to speak!