A tax refund is simply the tax already withheld, minus the tax you actually owe. Add your year-to-date or full-year federal withholding from your pay stub and see the difference.
How a tax return estimate works
- Compute federal income tax from income, deductions and credits.
- Compare to the federal tax withheld from your paychecks.
- If withholding is higher, you get a refund. If it is lower, you owe the difference.
Getting your withholding right
A big refund is an interest-free loan to the government. If you prefer more take-home pay, update your Form W-4 with your employer. If you often owe, increase withholding or make estimated payments.
This estimate covers a typical W-2 employee with the standard deduction. Credits such as the earned income credit, education credits and the refundable child tax credit are not modeled.