When tax season arrives, most people hope that they get a tax refund. If you’re in the process of filing your tax return, you likely have several questions about how the refund works. Here are some frequently asked questions about refunds to prepare you before doing your taxes.

Tax Refund FAQ

Why are refunds given?

Refunds are given if you overpaid on state or federal taxes throughout the year. This is calculated by determining your tax liability and subtracting it from how much you paid in taxes.

Will I get a tax refund?

If you worked and had taxes withheld from your paychecks during the tax year, there’s a good chance you’ll get a refund, though each situation is different.

The W-4 form you fill out when you start a new job allows you to claim allowances, which minimizes the tax amount taken out of your checks. If you’ve claimed several allowances, you’re more likely to owe taxes at the end of the year because they weren’t withheld from your paychecks.

You can search for online tools to calculate your tax liability, then use your paystubs or W-4 form to calculate if you’re overpaying or not paying enough. 

How do I maximize my refund amount?

Claiming more tax credits and deductions can help you maximize your refund if you qualify for them. For example, any money you spent on charitable donations, work supplies, or student loan interest can be deducted from your taxable income with the appropriate documentation.

Having a CPA help with your taxes can also get you a larger refund if they find more deductions and credits for which you qualify.

However, bear in mind that if you get a large refund, that’s money you’ve given to the government for free instead of putting it toward something you might need during the year, such as a savings account or bills.

When will my refund get here?

Whatever method you choose to get your refund, it should arrive within 21 days of filing your tax return. If it doesn’t, you may need to contact the IRS directly. They also have a tool on their website that allows you to track your refund status, so you know when it’s been approved and distributed.

If you want to maximize your tax refund or need assistance filing your return, the experienced team at Tudor Wilson & Associates, CPAs, in Honolulu, HI, is here to help. For over 20 years, they’ve provided dependable financial services, including tax services, retirement savings, and IRS audit representation. View their list of services online, or call (808) 592-2000 to schedule a consultation.