Posted by Fred Lake

Applying Tax Refund To Next Years Estimated Taxes

Applying Tax Refund To Next Years Estimated Taxes

You can apply all (or some) of the tax refund of 2019, to next year's taxes. When you return to your taxes in 2020, the amount applied will be displayed as a credit. When you pay taxes in a given year, the government will reimburse you for any amount you have paid in addition to a refund. Users typically use this refund as a work premium, to buy the items they need or want or merely to make a reservation in a bank or investment account. However, you can also apply a state refund to taxes next year.

Note: If you pay the estimated quarterly taxes, apply a portion of the scheduled tax refund in the first quadrant of the coming year, which expires on April 15th. This can help avoid fines for lower payments in next year's return.

Improve cash flow

Unforeseen events in life, such as job losses, quickly consume financial accounts. So, even if you plan well, it is not entirely possible to predict what your financial situation will be in the next fiscal year. You cannot guarantee that the application of your State's refund of future taxes will eliminate the need to pay extra money when the time comes. However, at least you may know that you will not have to calculate the amount of the refund. Mainly, this tactic saves money in times of plenty if next year is in deficit. This keeps your money flow and resources more stable.

Avoid paying penalties

Sometimes you have to pay estimated taxes as if you were working alone. Unfortunately, the estimates are not always representative of the actual amount due. In some cases, you can pay less. This involves penalties. If you apply the discount the following year, you will have an edge that reduces the possibility of facing a late payment penalty.

Protect yourself against bankruptcy

When a refund is applied the following year, it is more challenging to seize it for unpaid bankruptcy debt. This means that the refund cannot be considered part of your property if you declare bankruptcy. Advance payment of expenses thus protects the refund from being collected if faced with a bankruptcy judgment.

Pay less income tax

If you specify deductions, you should generally consider all or part of the tax refund by the state as taxable income the following year. However, if you apply for a tax refund the next year, you will no longer receive a refund as income. You will have to pay less income tax as a result of it.

Have payment options

Since the financial situation of each differs from one year to the next, the request for reimbursement for the following year is not subject to strict rules. Also, it is not necessary to apply the full refund of the tax next year. The desired value can be used.

Do you expect a refund and want to anticipate future taxes? Although most taxpayers receive cash refunds, they are not required to go that route. Instead, tax refunds can be applied to taxes estimated for the next year.

If you choose to apply for the refund next year, the refund amount will be applied to the first estimated payment until used. Using tax refunds in this way could help reduce the amount of money to be paid for estimated taxes. Not sure you want to use the full tax refund for this year? You can always choose to apply the refund for the following year partially.

Why are refunds delayed? Reasons for late repayments include:

  • Invalid or missing social security numbers;
  • Incorrect fees introduced based on taxable income and filing status;
  • Calculation errors in calculating taxable income, withholding taxes and estimated taxes, tax credit received, the flat-rate deduction for persons over 65, the payable amount of social security benefits, children's services and minors or missing or incorrect identification numbers of child assistants);
  • Storing and estimating tax payments on the wrong line and
  • Math Errors Other errors and checklists appear here.


Knowing when to apply for a tax refund is paramount, you should consider talking to a tax professional because this article is not meant to replace legal consultation and cannot be entreated for any reason without the services of a qualified professional.

Fred Lake
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