There are only 3 options when it comes to filing taxes. Either you pay taxes, break even or get a refund from the IRS. If you are getting a refund, your accountant or tax software may ask you “Do you Want to apply your refund to Next Year’s Return?” Read on to better understand your options.
Many taxpayers like receive their refund right away in their account via direct deposit or check by mail. Some choose a different path, Taxpayers can choose to apply their tax refund to next year’s estimated taxes either to the first Quarter estimated tax or spread the amount though out the year.
Contents
- 1 What Does it Mean to Apply Refund to Next Year’s Return?
- 2 Why would I want to apply my refund to next year’s tax?
- 3 How Do I Know If I Applied My Previous Year’s Refund to My Current years Taxes?
- 4 How do I change from applying overpayment to next year to immediate refund?
- 5 How do I apply overpayment to next year’s taxes?
- 6 Learn More
What Does it Mean to Apply Refund to Next Year’s Return?
Why would I want to apply my refund to next year’s tax?
If your current years income was lower or you over paid your estimated taxes then applying your refund to next year is the best option.
This option is useful if you expect next years taxes to be significantly higher(Due to Higher income) and you believe its best to pay those taxes though applying refund instead of getting the refund and then resending that to IRS as Estimate
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