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Tax Day is tomorrow. The IRS delayed the April 15 tax deadline to July 15 due to the coronavirus pandemic. You will have to file your return electronically or postmarked by Wednesday. If you need more time, you can file an extension by filling out the IRS’ Form 4868.
At this point, if you haven’t already filed your taxes, your best bet is to start preparing your return immediately with the best tax software and prep services for 2020. You can also see how much you’d get by calculating your refund right now.
Read more: Tax deadlines and dates for 2020: When they’re due, how to file online and more
1. Consider if you’re going to get a refund at all
Nearly three in four tax return filers in the US will receive a refund, which puts you in good company with millions of people. The rest of us will owe the government money.
Generally, your refund is calculated by how much money is withheld for federal income tax, minus your total federal income tax for the year. (There are other factors, too, like deductions — more on that below.) Remember that the taxes withheld from your paycheck don’t always go to federal income tax. You also pay into Social Security, Medicare and depending on where you live, state income tax.
Read more: 12 of the best tax deductions in 2020
If you received a modest refund last year — or actually owed money — you may need to adjust your withholding to help offset what you’ll need to pay come tax time. Otherwise, you’ll get stuck with a larger bill when taxes are due. (There’s also a chance your tax bracket may change; if you earned more, you could owe more, too.)
You can use the Tax Withholding Estimator from the IRS to make sure you have the correct amount of money withheld from your paychecks, whether they are weekly, biweekly or monthly. It’s good to have a recent pay stub and tax returns on hand to get the most accurate information when using the estimator before filing your tax return. Keep in mind that it works for most filers, but not necessarily for every filer. Every family situation, gross income, exemptions, withholdings and other factors can completely change how much you receive — or owe — come tax time.
Read more: The best tax software for 2020: TurboTax, H&R Block, TaxSlayer and more
2. Gather your necessary documents
Before you start your math, you’ll need a few different items for your calculations, including:
- Personal details: Your age, filing status (single, married filing jointly, married filing separately, head of household), if you have any dependents and if so, how many and their ages.
- Earnings information: Your pretax income, retirement plan contributions, how much you claim in deductions, and taxes you’ve already paid or had withheld so far this year. Some popular deductions include the child tax credit, student loan interest deductions and the home office deduction.
- Business expenses: If you work out of your home or have paid for work-related items, you might be able to claim it on your taxes or claim exemptions. Keep in mind that if you are a business owner, business taxes are filed separately or you’ll need to account for that income on your personal return. Be sure to read up on what expenses qualify before filing with itemized business expenses.
- Other details: Consider things like medical expenses, donations, interest on your mortgage, student loan interest payments, childcare costs and more. You might also consider that your income puts you in a new tax bracket, which can change how much you get as a refund (and possibly owe money).
Without this information, you might not be able to accurately calculate your 2020 tax refund.
3. Find a reputable tax refund calculator
Major tax software companies offer tax return estimators and calculators to help you determine how much you can expect to get back as a tax refund. Find calculators from:
While the specifics of each calculator varies, they all require much of the same information. Make sure you have all your necessary documents before starting your calculations. If you don’t, it might take you longer to compute your refund, or you might not get an accurate calculation.
Don’t delay
When possible, it’s best to prepare your taxes as early as possible. Delaying the inevitable can cause you stress — and it also gives fraudsters more time to scam and trick tax filers out of their personal information or refunds. Technically, you can start filing as soon as you receive your W-2s from your employer. This usually happens around the end of January, but varies depending on your employer.
Once you’ve gathered the necessary documents, you’re nearly set to file. And the sooner you file, the sooner you get your refund. Also, keep in mind that you will usually receive a refund more quickly if you set up direct deposit. Don’t waste time — file as soon as you can so you can join millions of other Americans who are expecting a return.
Read more: The best robo-advisors in 2020