3 Questions You Should Consider About Your Taxes
Filing taxes can be very stressful. There may be years when you get a tax refund and there may be years when you actually owe money to the IRS. It can be hard to know ahead of time which catergory you will be in if you don't understand taxes. Here are some things that will determine if you get a tax refund or not.
1. Did You Take Tax Credits For Health Care Coverage?
If you bought insurance through the market place you will have the option to take a tax credit if you qualify for one. That hard thing about this tax credit is that it has you estimate how much you think you will make over the next year. If you have a job that gives you an exact paycheck each month, it may be easier to estimate, however, even then extra money does come in. Perhaps you opened a photography business on the side, or you had another side job that brought in some money. Or even more common you are self-employed so you aren't exactly sure just how much money you will make each month. If the amount ends up being more than you estimated, you will have to repay the tax credit that you took. This could affect your tax refund, or if you owe money.
2. Did Your Small Business Have A Loss?
Second thing you need to look at is if the business that you own and run had a loss or a gain. If you have a loss it will help to put you in a lower bracket and so you can deduct more things from your taxes. The more you can deduct, the less you owe overall. This means that you could actually get a tax refund, especially if you had a loss. However, if you had a gain, especially if it was in big payouts, and you didn't withhold enough money throughout the year, you will end up having to pay money.
3. Do You Have Investments That Performed Well?
Much like your small business your investments will play a major role in whether or not you get a refund or owe money. If you have investments that performed well and you didn't have losses throughout the year, then you are more likely to owe money overall.
As you can see there are quite a few questions you should be asking yourself and considering to determine if you get a refund or owe money.