You will note that getting a bigger tax refund will need intensive planning all through the year. You will certainly need to ensure that you do proper filing of your taxes. You will note that tax refunds only happen under given circumstances. However there are a number of common factors that affect the tax refund. They comprise of the following.
We first look at your gross yearly income. You will note that you owe the government between ten and just about forty percent of your yearly income as tax. It is imperative to indicate that the tax owed is oftentimes proportional to the income that you earn. Total earnings will in most cases be premised on all sources through which you get an income. This will in most cases consist of wages as well as tips. You will also realize that there are federal taxes that are withheld too. These are usually estimates of what you need to cover as your tax at the end of the year. It is possible for these estimates to be submitted on a quarterly basis. It is important to keep in mind the fact that a tax refund will only come about if there is an overpayment in these estimates. It is therefore necessary that you ensure that the information that you give out is actually very accurate.
You will realize that your personal allowances will have a say on the kind of tax refund you will receive in the long run. You will realize that the number of allowances that you will illustrate will be definitive of the amount of federal tax that will be withheld at the end of the day. This is what will influence the amount of tax refund that you ae likely to get at the end of the day. If you do claim nil exemptions each passing month and hence getting a lesser, you are more likely to get a higher amount as a tax refund. The filing status also matters a lot. There are certain instances when it will be great for married people to file their tax returns separately. This is because it may result in a higher tax refund.
The number of dependents is crucial too. The amount that you owe will often go down if you have dependents under your roof. The credits as well as deductions available have an effect too. They will actually improve your tax refund. They will pay attention to things such as home improvements or even further education. You will learn that in case one contributes to his retirement plan then there is a higher chance of getting a better tax refund.