Will I owe tax on my Fed & Ga. refunds? If so, would applying some or all of the refund to upcoming estimated tax help?

[annh89]

We're self employed.

[PatriciaV · Accepted solution]

No, your Federal and State refunds are not taxable income on your Federal tax return. Some states, however, do tax certain refunds.

Applying your refund to next year is only useful if you believe you won't pay enough tax during the year to cover your taxable income. Generally, it's better to receive a refund and invest the money until next year. That way, you earn the interest on the money instead of loaning it to Uncle Sam.