In 2020, the IRS issued nearly 122 million refunds to people in the United States, amounting to more than $736.2 billion in refunded money. However, many people still do not get money back on their tax returns or feel like they should have gotten more money.
Luckily, there are many tips that you can follow when filing your tax return to get your maximum refund. Do you want to learn more about these tax season tips?
Keep reading this article for the easiest tax tips you can follow to increase your refund!
Choose the Right Filing Status
Choosing the right filing status is one of the easiest ways you can increase your tax refund. This will help, especially if you are married. Most married couples file jointly, which can help you earn more from your return.
You can also earn more if you have a qualifying dependent or if you are caring for your elderly parents. To get help choosing the right filing status, you can meet with a tax accountant to see which filing status would be most beneficial for your needs.
Time Your Payments
Timing your payments is another simple way to boost your tax refund! If you have large payments or contributions that are scheduled for the end of the year or the beginning of the new year, you can time your payments to reduce your taxable income.
For example, many people will make mortgage payments for January before the new year, which adds interest to their mortgage interest deductions. By timing your payments, it makes it easier to qualify for credits and lower the amount of money you owe on your taxes.
Use Reliable Tax Software
Another easy way that you can maximize your tax return is by using reliable tax software. There are many online programs that make it simple to file your tax return, find your tax breaks, and even find tax credits to help you save even more money!
To get the most out of your tax return, you need to compare the different types of tax software and read online reviews about each one. The IRS also has a list of approved tax software that you can use.
Claim Recovery Rebate
Next, you can claim the recovery rebate credit to help maximize your tax return! This is a credit for those who didn’t receive the third stimulus payment that was sent out in 2021. It can also apply to those who didn’t receive an accurate amount for their stimulus check!
If you qualify for this, you can receive your economic impact payment as part of your tax refund.
Properly Claim Dependents
You also need to be sure that you properly claim your dependents. There are large credits that benefit those with dependents. This includes the child tax credit and the dependent care credit.
This can help you earn a few thousand extra dollars on your tax return.
For dependents, you can claim children and even friends or relatives that you are supporting financially. You can even receive these dependent credits if you hadn’t claimed your dependent child in years past.
Take an Itemized Deduction
When you are doing your taxes, you can choose whether you want to take a standard deduction or do an itemized deduction. If your itemized deductions are larger, taking the time to fill this out will help you save money!
One way you can make the most out of your tax return is with a practice called bunching. You can bunch as many deductible expenses into a single year as possible.
For example, you can bunch two years of your charitable contributions into a single year to take the itemized deduction. Then, you will take the standard deduction next year. This way, you can meet the limits for itemized deductions!
You can also use this for medical expenses, home mortgage interest, property taxes and more.
Deduct Charitable Contributions
Deducting charitable contributions is another way you can save money if you don’t itemize your tax deductions. If you use a standard deduction, you can deduct $300 from your tax payments for contributions made to qualifying charities or organizations. You can save up to $600 if you are married and filing jointly with your spouse.
Find Tax Credits You Qualify For
There are many tax credits that you may qualify for, so it is important to do your research to find additional tax credits that may apply to your family. For example, there are solar tax credits for people who install solar panels on their homes.
You can also get adoption tax credits, earned income tax credits, and more. You can even get an American Opportunity Credit if you are paying for college. This will give you up to $2,500 per student.
If you want to learn more about tax credits, you can talk with your tax consultant to see what you can qualify for.
Contribute to Your Retirement
Another simple way to increase your tax return is by contributing to your retirement accounts. You can contribute from an Individual Retirement Account (IRA) or a Health Savings Account (HSA) even if you don’t itemize.
You can deduct these contributions which can help you make even more on your tax return. The amount that you can contribute and deduct will depend on your adjusted gross income, so make sure you know this before you start filing your taxes!
Get Professional Advice
Finally, you can get professional tax advice to help you maximize your tax return. Often, tax consultants offer free consultations to discuss your questions and find ways to offer the best help.
Plus, professional tax consultants deal with taxes for a living, so they are more familiar with the ways that you can deduct your income and get your maximum return. If you want help to reduce IRS taxes owed, we can help!
Get a free evaluation from our tax experts today to learn more about reducing the amount of taxes you owe.
Need Other Tax Season Tips?
Tax season does not have to be an overwhelming time for you. To reduce the amount of money you owe or to make the most of your tax return, you can follow each of these tax season tips!
Do you need help learning more about tax season and how you can prepare? We can help! Our blogging website features expert information on everything from business and finances to technology and more.
Check out our blogs today for more finance tips and to start preparing for tax season.