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Best way to know if your tax refund is larger this year

posted 6 years ago by Keelai (36138)
16 replies | jump to latest

Many people are guessing or just assuming based on the refund, but that could be inaccurate if your paycheck amount changed due to tax withholding during the year.

For comparison, you'll need 2017s W2 and your Federal refund amount (not state or local portion) to compare with 2018s.

1. Write your Federal income tax withheld (W2 #2) minus your federal tax refund = the Federal tax amount you paid.

2. Write your gross salary (W2 #1)

3. Put the figures in the percentage calculator "Calculate The Percentage Of Value To A Value"

Percentage calculator link:
http://www.csgnetwork.com/csgpercent.html

4. For 2017 figures:
Enter Refund amount in first box then gross salary in second box. Calculate.

5. Repeat for 2018 figures and compare percentage of your gross salary went to federal taxes.
_______________________________________

Extra:

If you want to know how much you saved or lost in dollar terms for 2018, use "Calculate The Value Of A Percentage Of A Value"

Take the percentage difference figure in first box and the Federal tax amount you paid in second. Calculate to see how much you lost or saved in 2018.

[–] Sandoz (2021) 6 years ago

Or, just for comparisons sake, you could enter all your financial information from 2017 into the worksheet for 2018 and see how the new rates increase or decrease your return. I did that as an experiment on the online tax service I used and it showed my refund was almost two hundred dollars less.

[–] Keelai (36138) 6 years ago

I thought of that. It doesn't take into account that during mid-2018, the amount of money taken from most paychecks was lowered.

[–] TJLamb0518 (3316) 6 years ago

Don't you mean it's the best way to know if you paid less taxes this year? I mean, telling if your refund is larger seems pretty straightforward.

a) Did you get a refund last year?
b) Did you get a refund this year?
c) If a) is No and b) is yes, your refund is larger. If a) is yes and b) is no, your refund was not larger. If both a) and b) are yes, was a) a larger amount than b)? If yes, your refund was not larger. If no, your refund was larger.

[–] [deleted] 6 years ago

That's how I figured it out - simply comparing 2017 refund to 2018 refund.

[–] CraigC (8792) 6 years ago

This is moronic, you need to be figuring how much you PAID in taxes, as a percentage of your income, not just looking at your refund. If your income or deductions changed, that needs to be taken into account.

[–] Keelai (36138) 6 years ago

Finally! You appear to be the only one who understands that.

[–] [deleted] 6 years ago

Mine didn't change that drastically (if at all) - so I go back to comparing the two refunds.

[–] Keelai (36138) 6 years ago

Refunds could be lower since less was taken from 2018 checks. The withholding amount also changed mid-year but many employers hadn't updated which created smaller refunds. In other words, most people received their refunds in their paychecks instead of as a tax refund.

Comparing only refunds dollars can be deceiving.

Also, refunds could be deceptively larger if you receved a 2018 pay raise since you'd pay more in taxes anyway.

Percentage of your tax bill is more clearcut.

[–] TJLamb0518 (3316) 6 years ago

But that's not a refund. It's a lower taxable amount or a change in the taxes taken from your income. A refund is specifically that. A refund of the amount you overpaid on what your taxes were. So, again, you are saying people can check to see if they are paying more or less taxes (in proportion to their annual salary) by seeing what percentage of your annual salary went towards taxes. But that's not the same as a refund.

[–] [deleted] 6 years ago

Indeed.

[–] CraigC (8792) 6 years ago

So you don't care if you pay more in taxes as long as you get a bigger refund????

[–] TJLamb0518 (3316) 6 years ago

Of course I care.

Where did I say I didn't care? (answer...no where)

BUT the thread is not ABOUT how much taxes you paid, but how much your REFUND changed.

Words matter. (NOT the motto of the Trump administration)

[–] Keelai (36138) 6 years ago

You're playing semantics. I wrote that the refund amount could be deceiving which is why I gave instructions to find the tax amount actually paid.

[–] TJLamb0518 (3316) 6 years ago

It's usually people who realize they spoke wrong and refuse to just SAY so that end up pulling the "semantics" word.

[–] Keelai (36138) 6 years ago

Obviously, you have no idea what the thread is about.

Nevertheless, if you're only paying attention to the dollar amount of your refund, then you don't know your effective tax rate in comparison to your marginal tax rate and if your tax planning is effective in a year over year basis and in relation to the effective tax of other taxpayers in your bracket nor what your real "Trump" tax savings is.

For instance, I know that Trump saved me a measly $132.17 even though my 2018 refund is much larger.

[–] PaladinNJ (21772) 6 years ago

Simplest way I figured out: I plugged the numbers from this year's tax return into the 2017 software. The 2017 refund would have been larger.