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

February 1 — Individuals who must make estimated tax payments
If you did not pay your last installment of estimated tax by January 15, you may choose (but are not required) to file your income tax return (Form 1040) for 2016 by February 1. Filing your return and paying any tax due by February 2 prevents any penalty for late payment of the last installment. If you cannot file and pay your tax by February 1, file and pay your tax by April 18.

February 1 — Payers of gambling winnings
If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W2G.

February 1 — Nonpayroll taxes
File Form 945 to report income tax withheld for 2016 on all nonpayroll items, including backup withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit or pay any undeposited tax under the accuracy of deposit rules.

February 1 — Social Security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2016. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until February 10 to file the return.

February 1 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2016. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more for 2016 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.

February 1 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2016. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.

February 1 — Federal unemployment tax
File Form 940 for 2016. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.

February 1 — All businesses
Give annual information statements to recipients of certain payments you made during 2016 - Details

February 1 — Form 720 taxes
File Form 720 for the fourth quarter of 2016.

February 1 — Wagering tax
File Form 730 and pay the tax on wagers accepted during December 2016.

February 10 — Nonpayroll taxes
File Form 945 to report income tax withheld for 2016 on all nonpayroll items. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Social security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2016. This due date applies only if you deposited the tax for the quarter timely, properly, and in full.

February 10 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2016. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2016. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Federal unemployment tax
File Form 940 for 2016. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Employees who work for tips
If you received $20 or more in tips during January, report them to your employer - Details

February 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 January.

February 12 — Regular method taxes
Deposit the tax for the last 16 days of January.

February 15 — All businesses
Give annual information statements to recipients of certain payments you made during 2016 - Details

February 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in January.

February 15 — Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in January.

February 15 — All employers
Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2016, but did not give you Form W4 to continue the exemption this year.

February 16 — Individuals
If you claimed exemption from income tax withholding last year on the Form W-4, you must file a new Form W-4 by this date to continue your exemption for another year - Details

February 20 — Everyone
Federal Holiday (Washington's Birthday) - Details

February 25 — 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 January.

February 28 — Regular method taxes.
Deposit the tax for the first 15 days of February.

February 28 — All businesses
File information returns (for example, Forms 1099) for certain payments you made during 2016.

February 28 — Payers of gambling winnings.
File Form 1096 along with Copy A of all the Forms W2G you issued for 2016. If you file Forms W2G electronically, your due date for filing them with the IRS will be extended to March 31. The due date for giving the recipient these forms remains February 1.

February 28 — All employers
File Form W3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W2 you issued for 2016. If you file Forms W2 electronically, your due date for filing them with the SSA will be extended to March 31. The due date for giving the recipient these forms remains February 1.

February 28 — Large food and beverage establishment employers
File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to March 31.

February 28 — Wagering tax
File Form 730 and pay the tax on wagers accepted during January.

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