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Using a tax refund calculator is a simple way of calculating a tax refund. Most are able to give a reasonably accurate estimate after the user answers just a few questions. The inputted information is then processed according to a formula based on that year's tax laws. It is important, however, not to depend entirely on a tax refund calculator as it could be off somewhat.
Filling out the information required for a tax refund calculator may seem similar to filling out a tax return, but there are some conveniences. There is no need to worry about entering Social Security numbers, or other information that does not pertain specifically to the actual refund. Thus, the process usually goes much faster, enabling the individual to get a quick estimate, even if he or she is not yet ready to fill out a full tax return.
The initial information that may be required includes how much you earned during the past year, and what taxes have already been paid. This provides the basic framework for figuring out whether the individual will receive a refund, and how much that refund will be. The results will vary depending upon the particular tax situation.
For those who find that the tax refund calculator shows no refund, do not worry too much before the tax return itself has been completed. It is possible that the results are inaccurate for several reasons. For example, some information may have been entered incorrectly into the tax refund calculator, or the tax return may be so complex that the tax refund calculator is incapable of adequately predicting a refund.
One task that tax refund calculators cannot do is to account for how much a person may owe the government. This may come in the form of back taxes, defaulted student loans, or other government-backed situations. In those cases, once the amount owed is deducted from your tax refund, the refund may be substantially less, or non-existent.
Finally, one should consider that many tax refund calculator products are sponsored by major tax preparation companies. These companies may ask for personal contact information in order to use the system in hopes of landing the taxpayer as a client. For those who do not wish to give out personally-identifying information, there are plenty of calculators online that do not ask for this type of information, yet still provide an adequate picture.
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