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How do I Use an Income Tax Refund Estimator?

If you are anxious to file your return, an income tax refund estimator can be a useful tool. These online calculators, while not intended as a substitute for professional tax preparation assistance, can help you get a better idea of what to expect when you file your return. This can be particularly helpful if you're planning to use your refund to pay off credit card debt, make large home improvements, or save towards a family vacation.

You don't have to worry about identity theft or online security when using an income tax refund estimator or other tax preparation assistance tools. These online services do not ask for your name, birth date, Social Security number, or other identifying personal information. Calculators for estimating tax refunds do not save or store information; your data will be erased once you leave the Web site.

To make an income tax refund estimator as accurate as possible, read all of the directions before you begin. Basic information such as the number of dependents and your filing status can be obtained from your previous year's return. Recent pay stubs can help you enter wage information for the year. It's fine to enter approximate amounts if you are missing some of your financial data, but keep in mind that this will decrease the accuracy of the your refund estimate.

An income tax refund estimator will work best if your return is fairly simple to prepare, since variables such as self-employment deductions or income subject to capital gains tax make filing a bit more difficult. In fact, the vast majority of online calculators do come with an official disclaimer stating they make no claims as to the accuracy of the information provided and you must agree to use the calculator at your own risk. You may even find that you get slightly different estimates of your refund when you use more than one online calculator.

While income tax refund estimators are the most popular form of online tax preparation assistance, there are a number of other resources available as well. There are online calculators available to help you figure education tax benefits and credits for dependent care expenses. Most large tax preparation services also offer checklists to help you determine if you are taking all of the deductions you may be entitled to receive, such as special deductions related to the expense of searching for a new job or buying a new home.

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