Tax Return Projection: File now or File in April?

Every year I normally anxiously await my W-2 so I can file as soon as possible to get my (hopefully small) refund. I have now devised a way to estimate my tax refund (or liability) based on your 12/31 pay stub.

Here is how it works:

• Find the "Gross Pay Year to Date" number on your pay stub.
  
• Subtract the Standard Deduction (or itemized deductions) and any exemptions (found on form 1040, page 2, online PDF)
• Subtract any other estimated expected deductions (IRA contributions, Student Loan interest, Capital Loss, etc)
• Add any interest earned, IRA Distributions, Capital Gains, etc. (estimate)
• The result is your rough taxable income.
• Look up the result on the tax tables in the instructions for 1040 (online PDF)
• This is how much tax you "owe".
• Compare this number to your federal withholding on your final pay stub (and any other withholding you may have had during the year)
  
• Subtract the "owed" tax from your withholding. Positive = refund. Negative = What you owe.

If you are due a refund then you want to file as soon as possible. If you owe money you will want to wait as long as possible to file (April 15) so you can have time to plan for the expense and also pay it as late as possible. Note that this is a rough estimate and real numbers may change but you can at least have an idea!