Every year, millions of Americans across the country eagerly anticipate receiving their tax refund. Whether it’s to help put a down payment on that new car you’ve been eyeing, contributing to a down payment on a house, or just money to save for a rainy day, everyone can agree that extra money is never a bad thing. In this article we’re going to cover how your tax refund is actually calculated, what you can do to ensure you receive the most money possible, and how you can get a portion of your tax refund early by taking home more of your pay throughout the year.
Let’s start with what your tax refund is exactly. Your tax refund is the money you get back each year when you file your tax return. The amount you receive is a combination of a few things: How much you earn, how many credits you claim, and how much you pay in taxes throughout the year.
The most common credits are the Child Tax Credit and the Earned Income Credit. If you have children living with you, you will likely qualify for at least one of these credits. There are plenty of credits for people with no dependents as well though. The saver’s tax credit is one example. This credit rewards you for contributing to a retirement plan, with the maximum credit you receive being $1,000, or $2,000 if you’re married filing jointly. We’ve only covered a small portion of available credits, but these all combine to reduce the amount of taxes you owe and increase your tax refund.
You may be wondering how you can access your tax refund early. There are a couple of ways, but one of the best and easiest ways is to use Grid Payboost. A major component of your tax refund is federal tax that you’ve been withholding throughout the year. These taxes are typically taken out of each paycheck, and your employer withholds them for you automatically. The main issue with this is that many people end up withholding too much federal income tax from their paychecks, and they’re losing out as a result.
The average Payboost customer receives a $250 increase in their take home pay after they sign up. This means you have more money in your pocket sooner and you don’t have to wait an entire year to receive your OWN money back with your tax refund. One of the worst parts about your refund is that you don’t earn any interest on it while the government is holding it. An extra $250 month can equate to over $100 per year in interest that you’re missing out on by overpaying your federal taxes. This article will show you how much you’re losing by waiting for your tax refund.
Are you ready to level up your financial game? At Grid, our single, powerful mission is to help Americans reach their financial goals. Whether you’re determined to boost your credit score, unlock the benefits of a cash-back credit card, or secure a personal loan, our simple and intuitive app is your ultimate ally. Download the app today and embrace financial empowerment!