Income tax refunds seem like a visit from Santa in springtime. With that quick boost to your wallet, you may be dreaming of that no-strings-attached shopping spree, paying down some bills, or simply hiding away the refund into a savings account.
For those of you collecting the barest of minimum in their refunds, the holiday feel is considerably less. Perhaps it is not coal you are finding in your stocking but it is not candy and gifts either. If this sounds familiar, you need to break out of the break-even mindset when preparing your taxes. Study the following tax strategies and see if any have the potential for holiday cheer.
Five strategies you probably aren’t using
- If you work full time for business, one of the first things you do when hired is to fill out IRS tax form W-4. Your W-4 information determines how much money is withheld from your paycheck. This money goes toward your personal income taxes. Fewer exemptions on your W-4 means more money taken from you pay, more taxes paid, and a bigger refund at tax time.
- Make charitable donations and you will see considerable tax savings. This makes for a larger and more lucrative refund. All kinds of donations qualify as tax deductions and help to lower your taxes. Only donations to a non-profit organization meet the requirements. Make sure the group proves their 501(c) (3) tax status. A lawful charity clearly displays their status on literature and websites. Also keep a receipt.
- Some employers call for employees to supply items that the employees buy from their wallet. If you are not reimbursed for those costs, some of that cost may be applied to your income tax, maximizing your refund.
- If you are caring for your children or aging parents at home, you know how expensive this often is. Several of those expenditures are deductible. Luckily, you can subtract costs related to caring your children and parents who are dependent on you. Healthcare expenses for the family can be deductible, too.
- An extremely endorsed method to increase your tax refund is to boost your retirement fund contributions. Paying into an Individual Retirement Account (IRA) both enables saving for retirement, as well as lowering your IRA total taxable income.
Remove Your Fears And Doubts About Tax.
The way to remove your tax concerns is to work with a tax specialist, making certain your IRA contributions are made promptly and correctly. There is a maximum amount that you can use for reducing taxable income. Consulting a professional will help you stay within all guidelines, helping to reduce all tax stress. Companies such as TaxBuzz will connect you with local tax experts that are suited to your personal needs.
Tax experts know what types and what percentage of expenses can lower your tax bill. This will surely affect your whole refund. Each and every one of us comes with a unique comfort level when taking care of our taxes. We all have a distinct process and outlook towards money and finances. It seems a no-brainer that your life will have less stress if you have your finances, and taxes, in order. Hopefully, you now have some other avenues to explore for even more tax savings next time around.