IRS Tax Tips Internal Revenue Service

When you start a job, your employer asks you to complete Form W-4. This tells your employer how much federal income tax to withhold from your paycheck. Depending on what amount of income and which credits you specify on the W-4, the more or less tax will be withheld. Having less taken out will give you bigger paychecks, but a smaller tax refund (or potentially no tax refund and a tax bill at the end of the year). While Americans may disagree on how the government spends their taxes, at tax time, many of us are looking for ways to pay no more than we owe — or even boost our tax refunds. These strategies go beyond the obvious to give you tried-and-true ways to reduce your tax liability.

Organizing your payments into a calendar gives you a way to visualize your finances, anticipate large bills, track spending habits, and monitor your debt. Your tax refund is a perfect opportunity to make a larger than usual payment on your debt. If you set aside a certain allowance every month to pay toward debt, adding your tax refund in part or in full can help you pay off the amount due faster than planned. Even a small portion of your tax refund can help you get one step closer to paying off your debt. Be aware that restrictions and penalties may apply if you make early withdrawals from your retirement funds. People often use their refunds to repay money borrowed for unexpected expenses, such as medical bills or car repairs — and that’s good, Dr. Roll said.

How a Tax Refund Works

By stating that you will be getting certain credits or deductions will mean bigger paychecks and likely a smaller refund (or perhaps owe some additional tax). One of the first decisions you make when completing your tax return — choosing a filing status — can affect your refund’s size, especially if you’re married. While approximately 96% of married couples file jointly each year, a joint return is not always the most beneficial option. Learn why all international students and scholars are required to file a U.S. federal tax return even if you do not have a source income from the U.S.

Some countries may also exclude other categories of goods. Those that choose to do so must make the appropriate arrangements with the tax authorities. Ken Corbin is IRS’ first Chief Taxpayer Experience Officer. In this role, he’s working to unify and expand efforts across the agency to improve the customer experience for all citizens interacting with the IRS. Some firms offer RALs with no fees or interest, but others may charge fees and interest.

Dear Life Kit: My husband secretly racked up our credit card bill. Now what?

You should apply for a National Insurance Number (NIN) when you arrive. Once you find a job, your employer will give you a Tax code declaration (IR330) form to fill in so they know how much tax to deduct from your wages. The Japanese Insurance Agency will take 20% in tax off your pension refund. If you want to work here, you should apply for a Social Insurance Number (SIN) so your employer can tax you correctly. You should to register at the local municipal administration office/town hall (maison communale/gemeentehuis) within eight working days if you plan on staying three months or more.

  • Adam Wood, co-founder of Revenue Geeks, says your best bet for a speedy refund is to file electronically.
  • Having a little extra cash for a rainy day can go a long way.
  • United Way has made it available to over 100 million U.S. taxpayers as part of our fight for the financial stability of every person in every community.
  • You can buy VAT-free goods even if you are going to be visiting other EU countries before you finally return home, as long as you actually leave the EU with the goods within the time limit.
  • If you had health coverage in 2021, check the “Full-year health care coverage,” box 92, on your state tax return to avoid penalties.

We all know that the IRS assesses millions of dollars in penalties from taxpayers every year, but many people are not aware that the IRS also offers penalty relief for those eligible. It is important to understand what your obligations are to the IRS and the right penalty relief options there are for your particular situation. For example, you may have late payment penalty, which means you didn’t pay your taxes by the due date of the tax return, generally April 15, but May 17 for 2020 returns. There are many different types of penalties but here we will explore the types of penalty relief options offered by the IRS.

Double-check Your Deductions

Your tax refund isn’t going to get you a new kitchen or bathroom. But it can open the door to smaller remodeling projects that are on your home improvement to-do list. And if you have private health insurance with a high-deductible plan, that trip to the ER (or any medical treatment) can come at a high price. A high medical bill might mean that you have to put off something else that you were looking forward to — like a much-needed family vacation or a home remodel.

  • Tax refunds usually are issued either as checks and sent by U.S. mail or as direct deposits to the taxpayer’s bank account.
  • You will receive a Request for Information letter (Form DTF-948 or DTF-948-O) with details about the information we need and how to respond to the letter.
  • If you have debts to pay off, spending your tax refund on entertainment or material goods is likely not the wisest choice for your money.
  • In this case, 7.5% of $100,000 is $7,500, so the remaining cost of $2,500 ($10,000 – $7,500) could be an itemized deduction on their return.
  • The drop is primarily the result of the end of more generous tax credits, which were temporarily expanded as part of the federal pandemic relief program.
  • Direct deposit into your checking or savings account is the fastest and easiest way to receive your refund.

The information on the Office of Global Services webpage is provided as guidance and is not intended to be legal tax advice. The Office of Global Services staff are not tax specialists and are NOT qualified to answer international students/scholars questions regarding taxes. If you believe you have a complicated tax issue, please consult the U.S. Internal Revenue Service, local and state tax agencies and tax professionals for advice and guidance regarding your individual tax situations.

For more information and a complete list of all disasters declared by the governor, visit and search for disaster loss. If your refund status says we sent you a letter requesting additional information, see Respond to a letter for more information and to review our checklists of acceptable proof. Select the type of refund status message you received for an explanation of your return and refund status. When you submit your tax return, it will go through several steps of processing. A simple return will process faster, but returns requesting certain credits that are an attractive target for fraud will likely require additional review by one or more department-review systems.

Tax Tips: Tax Returns and Tax Refunds

You’ll be considered non-resident for tax purposes if you stay for 183 days or less in any 12-month period. Non-residents are only taxed on their New Zealand sourced income. This means that from this time, you will not be able to avail of the tax-free threshold. Electronically filing your tax return may also help you get your refund sooner. If you do e-file, hold on to your pin number — which you’ll receive when your return is sent through — with the rest of your files.

• Families with low-to-moderate incomes may qualify for an Earned Income Tax Credit worth up to $6,935 (tax year 2022), which is paid as a refund if you don’t owe any tax. The Office of Global Services has arranged access to Sprintax for you. Sprintax will guide you through the tax preparation process, arrange the necessary documents and check if you’re due a tax refund. Individuals must be between the ages of 18 through 25 at the end of the tax year and satisfy foster care verification requirement.

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