Filing your taxes can be a hassle, but it often comes with a considerable perk. Many filers will receive a tax refund once their taxes are processed. If you’ve already started making plans for your refund check, make sure you follow a few tips to get the most money back into your pocket.
Use Tax Deductions
Before you worry about the time to get a tax refund, familiarize yourself with tax deductions. The more you can deduct, the bigger your return will be. Many deductions get overlooked because they range from student interest and child care to charitable donations and jury duty fees. Tax filing websites and accountants will help walk you through what you can deduct, but it’s best not to rely on them.
Consider Your Status
Your filing status can heavily influence your return. Weigh your options prior to selecting your status. The widest discrepancy is usually with married couples. Filing your taxes jointly is easier and even offers some joint deductions. However, filing separately may save you more in the end due to additional deductions and tax credits. If you are single, filing as the head of the household can be more beneficial than using the single status. To qualify, you must have a child or elderly parent as your dependent.
Keep Good Records
Itemizing your deductions can be better than taking the standard deduction. If you will be using an itemized deduction, you should keep good records. Using a notebook to record mileage and a folder for receipts all year long will prevent you from missing out during tax season. You’ll also be thankful for your records should you ever be audited.
Watch Your Timing
Even though taxes are due in April, the tax year coincides with the calendar year. That means if you want something to count towards your taxes, it must be completed by December 31. Squeezing in extra mortgage payments, medical expenses, and charitable donations before the new year can bring your money back more quickly.
Claim Tax Credits
Tax credits reduce the amount of taxes due and may be refundable if you don’t owe. Surprisingly, many credits go unclaimed each year because people don’t know that they’re eligible. You may be eligible based on your income, dependents, health insurance, or education.
Once you learn to maximize your tax return, you might just look forward to filing taxes. This year’s return could be your biggest yet!