As frustrating as tax season can be, it’s something that many people look forward to. It’s the time of year when some taxpayers are in line for a tax refund. Receiving an unexpected cash injection is always something to get excited about!
However, whether you get a few dollars, a few hundred, or a few thousand can ultimately depend on whether you’ve implemented the many available tax tips and tricks. If you want to maximize your tax refund for this upcoming season, this advice might help:
Leave Your Taxes to the Experts
Most people don’t like doing their own taxes. That can be reason enough for them to seek out a top tax agent in their area. However, you might be more likely to hand over the reins and have someone else handle your return if there’s potential for you to receive a bigger refund.
Tax agents know all the ins and outs of the tax system and can identify where you’re not claiming what you’re owed. If you let them file your taxes on your behalf, you might enjoy a much larger tax refund than you thought possible.
Keep Accurate Records
Record-keeping isn’t everyone’s strong point. There can be so much administration involved, and not everyone has time for that! Still, you might be more motivated to refine your record-keeping skills if it could mean a bigger reward at the end of the financial year.
Keeping organized and detailed records of your income, receipts, and expenses can often make it easier to claim credits and deductions. The IRS then has all the proof they need to know you’re owed as much as you say you’re owed.
Track Your Deductible Expenses
Many people spend money on everyday living without considering the possible tax benefits. However, if you were to spend more intentionally and track what you’re spending, you might stand a better chance of claiming more deductibles and receiving a bigger tax refund.
You might be surprised by how much you can deduct on your tax return, such as:
- Qualified residence interest
- Childcare expenses
- State and local income taxes
- Sales taxes
- Property taxes
- Alimony (pre-2018)
The more deductibles you’re aware of, the more you can claim, and the higher your tax refund might be. Start keeping records of your expenditures to streamline the tax filing process.
Claim Tax Credits
Tax credits are government-provided financial benefits to reduce how much tax you owe. There are many different tax credits available, many of which you could be eligible to claim. For example, families, dependents, and students might be eligible for earned income tax credits, child tax credits, and education credits. If you’re in business, there are also many different business tax credits to explore.
Knowledge is power. Tax season will arrive soon enough, so now might be the right time to learn more about tax credits you’re eligible for and enjoy a more favorable tax refund outcome.
Contribute to Retirement Accounts
Retirement accounts like IRAs and 401(k)s provide you with a helpful nest egg to cover your everyday costs once you retire from the workforce. However, there’s more to the average retirement account than meets the eye. Your contributions may be tax-deductible. It’s also possible for your contributions to grow tax-deferred until the time comes to withdraw them.
You might already be happy with your tax refund, but that doesn’t mean it can’t be better than it is. Hire tax experts, keep sound records, and know your entitlements. Your next tax refund may then be far more lucrative than you expected!