Tax Refunds and Withholding

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The most important thing most people want to know about their tax return is how much tax refund they will get back.

As you use TaxAct, you can see how much you owe or are receiving as a refund as you enter information on your return. As TaxAct helps you find every tax benefit to which you are entitled, that number should look more and more favorable.

No one complains when they get a healthy tax refund.

Nevertheless, the first thing you should do when you get an especially large refund is to make sure it doesn't happen again next year.

Getting a huge refund every year means you're having too much income tax withheld from your paycheck all through the year, or you're paying too much in estimated taxes.

You can make better use of your money by keeping it in your control all year.

If you have high interest credit card debt, you're better off using the money to pay off that debt as soon as possible. If you have an emergency, your money should be someplace where you can access it if you need to.

If you use overwithholding as a kind of forced savings plan, consider other automatic savings plans that give you a better return and let you keep your own money. You can have your employer deduct some of your pay for a retirement plan, or deposit it directly into savings for you. Or you can set up an automatic online plan for investing or transferring to a savings account.

Some people hesitate to lower their income tax withholding because they're afraid they might end up owing money when they file their taxes. They'd rather shortchange themselves all year than possibly end up with a bill at tax time.

You don't have to choose between having way too much withheld or worrying about owing taxes at the end of the year. Using the Form W-4 Withholding section, you can make sure your income tax withholding more closely matches the amount you owe the IRS when you file.


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Upcoming Tax Dates

April 10 — Employees who work for tips
If you received $20 or more in tips during March, report them to your employer. You can use Form 4070.

April 10 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the first 15 days of March.

April 14 — Regular method taxes
Deposit the tax for the last 16 days of March.

April 18 — Individuals
File a 2016 income tax return (Form 1040, 1040A, or 1040EZ) and pay any tax due. If you want an automatic 6 month extension of time to file the return, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. For more information, see Form 4868. Then, file Form 1040, 1040A, or 1040EZ by October 16.

April 18 — Corporations
File a 2016 calendar year income tax return (Form 1120) and pay any tax due. Details

April 18 — Individuals
If you are not paying your 2017 income tax through withholding (or will not pay in enough tax during the year that way), pay the first installment of your 2017 estimated tax. Use Form 1040ES.

April 18 — Household Employers
f you paid cash wages of $1,800 or more in 2016 to a household employee, you must file Schedule H Details

April 18 — Corporations
Deposit the first installment of estimated income tax for 2017 Details

April 18 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in March.

April 18 — Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in March.

April 18 — Household employers
If you paid cash wages of $1,900 or more in 2016 to a household employee, you must file Schedule H (Form 1040). If you are required to file a federal income tax return (Form 1040), file Schedule H (Form 1040) with the return and report any household employment taxes. Report any federal unemployment (FUTA) tax on Schedule H (Form 1040) if you paid total cash wages of $1,000 or more in any calendar quarter of 2015 or 2016 to household employees. Also, report any income tax you withheld for your household employees.

April 27 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the last 16 days of March.

April 29 — Regular method taxes
Deposit the tax for the first 15 days of April.

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