Are you looking to get the most out of your tax refund this year? Then you’re in luck, because we at Ferguson, Timar & Company have compiled these simple tips that will enable you to increase your tax refund year after year. Take a look!
1. Increase Your Withholdings
Did you know that you can change your tax allowances or exemptions on the W-4 form you filled out when you started your job? The less you claim, the more tax is taken out of your paychecks. However, increased withholdings also lead increased returns. It is a trade-off you may consider.
2. Deduct Your Charitable Donations
You can deduct up to 50% of your taxable income if donated to charitable (tax-exempt) organizations such as churches, community groups, charities and other non-profit entities. Contributions can be in the form of money, property, stocks and securities. Also track any expenses you encounter if volunteering.
3. Job-Related Expenses
If you pay any money out of pocket for your job that is not reimbursed by your employer, track it and itemize these professional expenses on your personal tax return. Cell phones, laptops, work clothes/uniforms, car mileage when travelling to sales appointments or business meetings, and business meals are all good examples.
4. Make Sure You Have the Right Filing Status
Married couples who file together can claim more than single filers or couples filing separately. If you are single, study the head of household requirements and file under that status (if eligible) to increase deductions.
5. Family and Dependents
Always claim your dependents and know what familial expenses you can deduct for a larger return.
6. Home Refinancing
Any interest paid on a mortgage can be deducted. A refinance essentially restarts the mortgage payment process, which means more of the early payments are going toward interest. That means more deductible income.
7. Increase Your IRA Contributions
If you contribute to an IRA, you can deduct at least a portion of the contributions. Know your options.
8. Study Current Tax Laws and Rebates
The government is always offering rebates and tax credits for things like energy-efficiency home upgrades or hybrid vehicle purchases. Understand current tax laws and get reimbursed for certain home and lifestyle expenses.
9. Home Business
If you have a home business, there are deductions you can make for operating expenses like Internet, phone and mortgage/rent payments. Know the portions you can deduct and also make sure to properly track and report your income for any home business.
We hope you find these tips helpful. To get the most out of your tax return, it pays to work with a professional. At Ferguson, Timar & Company, we are personal tax experts who will work with you and make sure you take advantage of all the deductions and tax credits available to you. To schedule a tax appointment or ask questions about your tax return, contact us today.