If you’re looking for the best ways to boost your tax refunds, you’ve come to the right place! There are several little tips and tricks that you can use to cut down the amount that you pay to Uncle Sam.
Reevaluate Your Filing Status
If you’re married, you could be tempted to file jointly. While this might give you credits and returns that will reduce the amount you pay overall, sometimes filing separately can be cheaper. Use an income tax calculator to work out your taxes both ways before deciding your filing status. For example, a percentage of your adjusted gross income or AGI is deducted based on factors like medical expenses. If one spouse has a huge amount of medical expenses, filing separately allows that spouse to reach the necessary AGI based on his or her own income.
IRA Contributions
You might think that it’s too close to the end of the year to do anything to change the amount you’re going to have to pay for this year. But that’s not the case! IRA contributions until April 15th of the following year can be taken as a deduction on your tax return this year. IRA contributions can help you reduce your tax liability.
Also, if you’re over 50 years old, you can use the catch-up provision to maximize your IRA contribution.
Credits Are Pretty Cool
When you want to increase your tax refund, credits work better than deductions. Find out which credits you’re eligible for, and claim them no matter what. Your taxes go down a dollar for every credit dollar that you have. There are credits for everything from childcare and college-going children to credits for installing energy-saving appliances in your home, ATC Tax Pros will keep you abreast of all the available credits and let you know what you qualify for.
Be On Time!
Watch the calendar and pay off the right bills at the right time to make the most of tax deductions. For instance, mortgage payments from January, if they’re paid off by December 31st, will up the interest of your mortgage interest deduction. Same applies to property taxes paid.
Charitable Deductions
All that good karma you put out into the Universe through the year can come back and help you out when you’re filing your returns. It’s easy to remember big donations that you’ve made, but you should also keep track of the small donations that you’ve made to use in case you’re itemizing your deductions. Even volunteer work counts, because you can deduct travel expenses and other miscellaneous amounts that you spent while you were volunteering.
These are the five best ways to up your tax refunds, but if you want to find more ways to either reduce your tax liability or increase your refund, leave the tax preparation to ATC Tax Experts; as the saying goes here at ATC, Maximum Refund – Maximum Satisfaction!
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