Let’s face it – you don’t want to pay more in taxes than you have to. Uncle Sam gets enough of our dough already, right? You pay taxes all year, and the last thing you want to do is pay more come filing time. What’s even better is getting a larger tax refund. Here’s six ways you can do it.
1. Reconsider your filing status.
Have fun breaking this one to your spouse. Sometimes filing joint instead of married filing separately is not always the best option; sometimes you can get a better return if you file separately from one another. Your tax advisor can give you advice on which option is the best, as many factors come into play.
2. Keep track of all those deductions.
Do you travel for work? Write that down. Any expenses you accure in the act of your job, whether doctor’s visits, job-hunting, any other costs can all be deducted. Keep track of where each and every penny goes, and you can likely get a large portion of it back, or deducted from your taxes.
3. Claim the earned income tax credit.
Many people don’t claim their income tax credit, but credits give an even exchange – one credit for one dollar. Ask your tax advisor if you qualify for EIC and make sure to claim it if you want a larger refund.
4. Employment Taxes
If you’re self-employed, or have a job as an independent contractor, find out if you qualify for an employment tax credit. Since you don’t have an employer helping you pay your taxes, chances are you qualify to receive employment tax credit. Use something like ADP solutions or a similar program to keep track of your income.
5. Don’t forget donations.
Any donations you made to Goodwill, to charities, even tithes to church, can all be deducted from your taxes. The key is to keep track of them all throughout the year, as many people forget to count them.
6. Increase your IRA contributions.
Contributions to your IRA are tax deductible. Don’t forget to include them when filing, and you an increase your contributions during the year in order to deduct more.
Getting taxes back is one of the greatest things about tax season, so take the steps to ensure you get as much as you can. Then, once you have your refund, you can go all out and have some fun for all your hard work.