Paying taxes is an annual task it seems as though everyone dreads. Although you can’t avoid it, you can see the glass as half full by looking forward to a big refund!
But did you know most taxpayers aren’t fully aware of how to maximize their refund?
Everyone loves getting a check in the mail—especially a hefty one. Using the tips below to control how much you get back will have you getting an extra-large refund in no time!
All types of donations are eligible as tax deductions—take advantage of this!
Not only do donations make you feel good by helping others, but giving some of your extra money to charity can offer substantial tax savings; ultimately, this will make for a large and profitable difference in your refund check.
Keep in mind, deductible donations must be made to a nonprofit that can prove 501(c)(3) tax status.
2. Increasing Withholding Status
Starting a new full-time job means filling out a new W-4. The information you provide on this form determines how much money will be withheld from your check every pay period and paid toward your personal income taxes; this is determined by the amount of exemptions claimed.
Reducing your number of exemptions means a larger amount of money will be withheld each payday—this results in a larger refund.
Taking care of your family can mean big bucks—the good news is many of these expenses are deductible!
If you paid someone to care for your child, spouse or dependent last year, you may be able to claim the Child and Dependent Care Credit on your tax return! This credit can be up to 35 percent of your qualifying expenses, depending on your adjusted gross income.
And don’t forget about alimony and healthcare expenses—deducting both of these can help you get more money in your pocket.
4. Increase Your IRA Contributions
Did you know: increasing the contributions made to your retirement fund is one of the quickest ways to increase your tax refund?
Putting money into your IRA helps you save while lowering your overall taxable income—the more you contribute, the less taxable income you have. Less taxes being paid can make for a bigger refund!
Any change in your filing status can make you eligible for a larger refund!
In general, filing jointly tends to lower how much you pay out in taxes—increasing more of what you’re able to keep—however there are some instances when, as a couple, you may want to file separately. For example, if you have a significant amount of unpaid medical expenses or student loan debt.
Did you know: our experts can handle any and all of your tax concerns? For a FREE tax consultation, call today! (631) 921-6894.
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