The average income-tax refund is often around $2,000 or $3,000. This amount may be a win in your mind, but it’s not an ideal scenario. Those dollars could have been in your bank account this past year instead of being held by the federal government. Your goal should be to owe nothing with a very small refund, if at all. Learn how to win the tax game by trying to break even by the time April 15th rolls around. Your finances will thank you.

Try a Mock Tax Form

It may be the middle of the year, but you want to know if you’re on the right track for next year’s taxes. Think about going online and trying a tax calculator. You can even download the federal tax forms and fill them out with your best guesses on income and credits.

By trying this “mock” tax form, you get familiar with the different questions. If you might owe money, changing your withholding is a great place to start.

Review Your W4

Your W4 is a form that’s filled out when you first start a job. At the time, you may have wondered how to fill out a W4. There are just a few areas to complete, and you largely forget about it.

Your original W4 may have been filled out many years ago. It’s time to look at it again. If anything has changed, such as getting married or having a child, you need to update this form. It tells the government how much money should be withheld from your paychecks and why.

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Compare Your Situation to Last Year

Once you’re an adult, major life changes don’t occur too often. Many people make roughly the same amount this year than they did last year. Compare this tax year to last year’s filing. If you owed or received a refund, you can alter your withholding to create a balanced filing in April. When there’s a major change, you’ll need to estimate your situation as necessary. It may be a bit difficult to estimate your taxes until you get closer to year end.

Consult With a CPA

To make a nearly perfect return, consult with a CPA or certified public accountant. They can use their formulas and schooling in order to make an incredibly accurate estimate of your taxes. There will be a charge for this service so be aware of that fact. Use this information for each tax year moving forward. The latest changes will be in effect for some time.

Think About Estimated Tax Payments

You may be self-employed so changing a withholding on a W4 isn’t possible. Be aware if you need to make estimated tax payments. These payments are due during the tax year that you’re going to report next calendar year. You send in quarterly payments so that you’re paying down your tax bill. Increase or decrease the amounts so that you can break even in April.

It’s a difficult job to constantly stay on top of your taxes. You might try certain apps to estimate numbers and simplify the process. With a little bit of effort, you can be a master at your taxes so that payment is fair and on time.

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