What if I Overpaid My Taxes?

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If you work for an employer, a certain amount of every paycheck goes to federal income taxes. If you had more in taxes withheld than was needed for your tax situation, you have overpaid your taxes and are due a refund from the IRS. You must take specific steps to get your money back and to avoid any future overpayment.


When you first start working for an employer, you must fill out an IRS W-4 Form which determines the amount of tax that will be withheld from each paycheck. If you suspect that you will owe taxes for the year, taking fewer exemptions may cover a portion or all of the taxes you end up owning. If you expect to receive a refund, taking fewer exemptions will increase your paycheck amount without requiring you to pay taxes to the IRS later.


If you overpaid on your taxes for a certain tax year, you have not lost the money forever. Instead, you can get your overpayment amount back from the IRS if you take the proper steps. You must file your taxes using Form 1040 or Form 1040A to receive a tax refund due to overpayment. Using Form 1040EZ does not allow you to claim a refund from overpayment of taxes. On the form, you will choose whether you wish to receive your refund amount in the form of a check sent by mail, or through direct deposit to a checking account.

Payment on Future Tax

If you overpaid on your federal income taxes, you do not have to receive the money back. Using IRS Form 1040 or Form 1040A, you can request that the amount you overpaid be applied to the following year’s taxes. This strategy makes sense if your tax situation has changed and you suspect you will owe taxes for the current tax year. Once you choose to apply any overpayment to the following year’s taxes, you cannot change your mind and apply for a refund once the due date for filing your tax return has passed. Applying your overpayment to any owed taxes will decrease your financial responsibility when tax filing the following year.

Future Adjustments

If you find that the amount you overpaid in taxes is a sizable amount of money, you may request a new W-4 Form from your employer, which allows you to change your tax withholdings. By taking more exemptions on the W-4, you will decrease the amount of tax withheld from your paychecks. If your income has increased pushing you into a new tax bracket, or if you cannot claim as many tax deductions as before, decreasing your withholdings may result in your owing taxes. Consulting with a tax accountant can help you plan for your specific tax situation.