Well, looks like another tax season has crept up on us. Here come the stress, the piles of papers and the stacks of forms to fill in. And while everyone runs around trying to gather all the necessary info and make sure to meet the deadlines, there’s one side of the issue only some people look into. And that is how to get the most money back on taxes. Unfortunately, not many taxpayers research this topic and make the full use of the rights and benefits they’re entitled to in the sphere of the tax return. But clearly, boosting tax refunds should be one of the primary concerns of every respectable citizen willing to fulfill his duty to the country without paying more than he really owes.
It goes without saying that dishonest practices aimed at increasing tax refund (like underreporting your actual income to lower the taxes or claiming certain deductions you have no right to) are illegal and should not be considered or promoted under any circumstances. At the same time, American taxpayers should not make a mistake of receiving back less than they deserve during tax returns. As the tax preparers share, a lot of individuals don’t claim all deductions they’re entitled to and don’t employ personal finance tactics that improve their financial state and allow receiving a more substantial tax return.
However, a bit of insider information and a couple of extra hours spent on paperwork will help you pull in more money in the tax return than you normally do, and without committing any law violations. Without any further ado, here’re a few useful tricks just for you.
Tips to maximize tax return
1. Make sure to claim all deductions
If you’re a tax paying newbie, you need to know that deductions are certain articles of expenses that reduce the income subject to taxes. The full list of qualified credits and deductions American citizens may claim when filing for their tax returns are available on the IRS website. Apart from the most common deductions, which include medical expenses or housing mortgage interest payments, you should also claim the following deductions if they apply to you:
- fees and payments to professional and public organizations – membership payments to civic, professional or public service organizations, payments to prolong the extend the force of professional certificates, etc.;
- charitable donations (if they conform to legal requirements);
- travel expenses related to job assignments;
- home office deductions for businessmen conducting their activities from the home-based location;
- student loan interest payments.
2. Look into tax credits
Credits are even more effective when it comes to reducing the amount of money you owe in taxes and boosting your tax return. Tax credits directly decrease the income taxes of those who rightfully claim them. Again, you may check the list of available credits on the IRS website, but the most common ones you may appeal to are:
- earned income tax credit – may be claimed by those who earn less than $9,078 from wages or due to self-employment;
- education tax credits;
- small business health care credit;
- adoption credit;
- child and dependent care credits.
3. Hire an experienced tax preparer
If your taxes are quite complicated for you to figure out, it’s not too late to leave a tax preparation request for a local tax preparer on HireRush.com. A well-educated professional will determine which deductions and credits you may claim to maximize your tax return. He will also make sure that all forms and papers are filled in properly to avoid any fines or penalties. It often happens that tax lawyers’ or preparers’ clients end up saving more money in a tax refund than they pay to the pros.
4. Review your tax filing status
If you’re married, have kids, dependents or parents to take care of, you have great opportunities to rearrange your tax filing status in your favor, as well as claim individual deductions specified to your legal position.
For instance, most average married couples decide to file jointly to receive a larger tax return. At the same time, filing single while being married may be more beneficial for some due to the financial circumstances of each spouse. That’s why it’s necessary to get your taxes calculated in both ways to determine which method will save you more money and guarantee higher tax return.
Single parents and single individuals caring for their parents may significantly cut the amount of money they owe in taxes if they file as the heads of households.
5. Lave more for your IRA
Starting your retirement fund isn’t just a responsible move toward stable future, but also the way to reduce your taxable income and boost your tax return. The more money you contribute toward your retirement account before the deadline, the more significant refund you’ll receive.
There’re some limitations imposed on the maximum amount of IRA contributions that is not considered as taxable income, though. That’s why it’s better to enlist the professional’s assistance to ensure that your IRA contributions, as well as deduction and credit claims, are made correctly and on time.
