Many people are looking to find ways to pay no more than they should. At the same time, they try to find the means to boost their tax refunds. It is because taxes can be unpleasant and it’s critical for many to find strategies and legitimate ways to reduce their tax liability. The following are some top tips on how to maximize tax return.
Timing can Boost Tax Refund
Taxpayers who keep a schedule and know when they need to pay their mortgages, they improve their chances of getting a larger return. For example, they have to try to pay January’s mortgage payment before the end of December; this way they can get the added interest for their mortgage interest deduction. Or they can program to take their various health exams and treatments during the last quarter of the year. This way they can boost their medical expense deduction potential.
Moreover, if they property taxes, they can schedule to pay them also by the New Year’s Even, which can help them take the standard deduction, which means a bigger refund.
Check out for Various Deductions
Many people just simply assume that the standard deduction is the best choice they can get. But they need to look for more information on the ‘Miscellaneous Deductions,’ to see all the available options for them. They need to remember also not to forget about the ‘above-the-line’ kind of deductions, such as expenses for health and education. They can take these deductions whether they itemize or not.
Maximize IRA contributions
If taxpayers make use of a traditional IRA, they can be given you the flexibility of claiming the credit on your return, filing
early and using your refund to open the account. More specifically, traditional IRA contributions can reduce their taxable income. Moreover, people can take advantage of the maximum contribution and, if they’re at least 50 years old, the catch-up also provision which can be added to their IRA.
Use of Travel & Charitable Deductions
Travel records can help people reach the needed minimum percentage of adjusted gross income for miscellaneous deductions. For example, if they move for a new job about 50 miles, they can boost their tax refund, because they can deduct moving and travel expenses related to their relocation. Also, charitable deductions can offer to taxpayers substantial tax savings, which can make a practical difference in their refund. Taxpayers need to remember that although all types of donations can help tax deductions, there are -though- some restrictions. For example, the donations need to be made to a non-profit organization.
Check Out for Various Professional Expenses
Some jobs require employees to use special equipment that they need to purchase out of their own pockets. If the company doesn’t reimburse for those expenses, you can claim some of them on income taxes, to help maximize a tax refund.
For example, the subscription costs of professional publications that keep people updated about how to perform their job better can be deducted. The same goes for professional dues, such as those taxpayers pay to belong to specific professional organizations. Moreover, if they use their personal mobile phone for work purposes, they can also get deductions.
Use Professional Assistance
Professionals can take a better care of complex tax situations. Even though taxpayers can do their taxes adequately, a tax professional can help them a great deal. They know how to do research carefully and can advise their clients the best possible way. Research a tax professional carefully, and do not just choose one based on advertising (certainly not on promises of the highest refunds). Check their certifications, experience, and online reviews of their services. Note that lawyers and accountants may be qualified to sign tax returns without having any experience in doing so.
Review the Filing Status
Filing status, such as single or married can greatly influence the amount of money taxpayers receive their refund. Filing status may change in case people take a divorce or in the event of the death of a spouse. This kind of situations can make people more eligible to larger refund. Married couples who make their files jointly can expect a bigger tax refund. Filing a joint return tends to lower the overall tax bill and can offer some tax breaks unavailable to those filing separately. However, there are some reasons, which a couple may want to file separately. In this case, the couple should consider filing separately. If they have a significant amount of unreimbursed medical expenses, more than average amount of miscellaneous deductions or if one spouse is behind on child support or student loan debts.