Estimating your tax refund can be kind of a chore, especially if you are a small business owner or other professional who doesn't make a set amount of money each year. In fact, estimated taxes and refunds can be a game of chance if you don't know what you're doing and how many deductions you can take relative to your tax rate.
Who Gets a Refund
Estimating tax refunds can get complex, and many people don't even bother to do so, or to pay their estimated quarterly taxes which would give them a good idea of the refund process. The interesting thing here, though, is that tax refunds are obviously given (a) when you over pay on your quarterly or estimated taxes, and (b) given to people who have made enough money in a year to qualify.
So while estimating tax refunds can be a headache, it's also a good problem to have - after all, the very poor among us don't typically pay enough in taxes to see a refund, anyways. Just think - if you're looking at the possibility of a sizable tax refund, which means your business did well enough in the first place to be in this conversation!
Quarterly Taxes and Paying in Advance
The path to tax refunds generally begins by paying quarterly income taxes in advance. That is, every third month, paying about one-quarter of your estimated tax burden to the IRS in advance of the close of the year. That may not be possible for all people, and it certainly sounds out of the question for some, but it is a practice that will really help the refund process.
Accountants urge that, in paying quarterly income taxes, you go off what you made the previous year, and pay slightly higher per quarter (5-10%) to ensure you'll be covered when the year is up. The benefit of this is two-fold. First, you pay all your bills early with the IRS, which they like. And second, when it comes time to do your taxes in 2013, you've already documented all your payments, and you can quickly take deductions and get a quick and significant refund.
Refunds Are For Those Who Plan
While paying quarterly estimated income taxes aren't the only way to get a refund, of course, people who plan ahead have great success in earning back refunds from the IRS on their paid amounts, while taking deductions to boot. It's important to plan ahead and realize that you, too, can ensure a good refund check at the end of the year after quarterly payments and the use of deductions.
You can also estimate your tax return and refund
in advance with a host of online calculators and tools from http://www.express-tax-refund.com/, which makes the tax process easy.
How to Estimate Your 2013 Tax Refund