Social Media Means
Social Media Means
Photo: MART PRODUCTION
The biggest factor in determining a refund amount is how much you've paid in over the course of the year. Are you making an exact comparison? If the person you're thinking of has more dependents, or a different filing status than you, your tax returns will have widely different results.
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Read More »We hear this question often, and our answer is always the same: “It depends”. There are many factors that go into determining what refund a taxpayer receives after the tax return is filed. Change one of those factors even slightly, and the results can shift a lot. Here are just some of the factors: Are your friends/co-workers/neighbors having a lot of tax withheld from their paychecks all year? And are you have much less withheld? The biggest factor in determining a refund amount is how much you’ve paid in over the course of the year. Are you making an exact comparison? If the person you’re thinking of has more dependents, or a different filing status than you, your tax returns will have widely different results. Is your friend contributing more to his/her tax-deferred retirement plan at work? In most cases, money put into your work’s retirement plan is not taxed until you take it out. So even if you make the exact same wage, a person putting more into his/her retirement account will have less income to be taxed. The same is true for money put into a HSA plan for health care costs. Do you have other types of income, like self-employment or investments, or winnings from gambling/lottery? There are lots of other types of income that aren’t subject to withholding of tax – the tax on these gets figured on your tax return each year and can result in lower refunds or even having a payment due at tax time. And then there are tax credits! Expenses paid for education or child care, or just having children can mean thousands of dollars difference in tax. It’s also possible that your friend/relative is not properly preparing her/his tax return. We can help you understand your set of circumstances and choose a strategy for withholding that’s right for your needs and wants.
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