Why Consider Overpaying Your Taxes?
When it comes to paying your tax bill, it’s understandable if you want to be cautious. For some, that means preparing their taxes early in the season to avoid a rush as the tax deadline approaches. For others, it might mean purposefully making an overpayment of taxes.
If you’re concerned that your calculations might be low or have other reasons for wanting to overpay your taxes, you can increase your payment to be on the safe side. To figure out how much to add, you can round up to the nearest hundred or nearest thousand.
What Happens If You Overpay Your Taxes
If you overpay your taxes, the IRS will simply return the excess to you as a refund. Generally, it takes about three weeks for the IRS to process and issue refunds.
Prefer not to receive a refund? You can choose to get ahead on the following year’s payments and apply the overpayment to next year’s taxes.
What if you made an overpayment of taxes, but didn’t mean to do so? It’s possible that you realize at a later date that you missed a deduction or credit that would have lowered your tax liability or resulted in a refund. If that’s the case, you can receive money back by filing an amended return as long as it’s within the allowable timeframes.