Tax can be a huge pain. After all, it’s like giving away your hard-earned money to the government for what seems like free – right? The good news is that almost 66-percent of taxpayers are liable to get a refund from Uncle Sam when the refund season swings in.
You’re probably wondering how you can be one of these individuals.
The good news is that you have come to the right place.
This article was created to help our readers with down to earth tips to get the most from their tax return in the coming refund season.
Ready to get some more of your hard-earned dough back into your pocket?
Bigger Paycheck Vs. Bigger Returns
Tax as a saving account – now that sounds ludicrous.
Okay, so it won’t exactly serve as a savings account – but it’s a great way to invest money and know that you will get it back at the end of the financial quarter.
When you first get employed by a company, you need to fill out an IRS tax form, also known as the W-4. This form is the indicator to determine how much tax is going to be deducted from your paycheck each month.
If you want to maximize the returns you get at the end of the fiscal quarter, you can go into the department of human resources, and request to revise this form. Exclude some of the exemptions that you currently have on the form.
Downfall – you will end up getting less money from each paycheck. But at the end of the year, all of that extra tax you paid will be paid right back into your account in one large sum.
Manage Your Professional Expenses For Tax Forms
Do you work from home? Are you self-employed? What about company expenses?
Guess what – all of these mean you can claim more back from tax.
If you pay for anything work-related out of your pocket, and the company does not reimburse you, you didn’t burn your own hard-earned cash. You can indicate what you spent on, and a significant portion of this expenditure can be deducted from your income tax.
As you can imagine, over the period of a year – this can make a huge difference In your overall tax return.
Here are some examples of income tax deductibles that you can report.
Get In Touch With A Consultant To Help With Family Deductibles
If you are a parent, you probably know all about the health and care expenses that come with your children. Although you love them – there is no lie that they cost a small fortune.
From medical bills to food right down to education and medication for when they get ill.
What you may not know is that a large portion of these expenses are tax deductible.
Unfortunately, this is a somewhat vague field to approach to improve your tax refund at the end of the fiscal year. Which means you will need to get in touch with a professional to help you figure out what you can and cannot write off on tax.
Refinance Your Home
Ah, the love of being a homeowner. Typically, as a homeowner when interest rates are low – refinancing is a fantastic option as it will lead to lower mortgage rates monthly, which can be a lifesaver.
What many homeowners don’t realize is that this can also help bump up your overhead when it comes to tax returns.
The interest that you pay on your home is tax deductible. In the first few years of owning a home, the majority of your money will go towards covering this interest, with a small portion covering the actual cost of the home.
Through refinancing your home, you go back to the beginning phase, where your money is going strictly to the interest on your investment – which means that it is tax deductible.
This is, of course, one of those strategies that can go either way. Which is why it is important to get a professional to help you decide if this is a viable option for you. Your credit record will also impact whether or not you can implement this strategy to increase your tax returns in 2018. Read more on how to prepare your credit here.
Don’t Leave Tax Management Until The Last Minute
This mistake I made last year. Instead of managing my finances straight from the word go, I left it until a month before D day.
What happened?
I sat for hours on end trying to sort through mind-numbing bank statements, endless receipt records and income sheets. Trying to figure out what was mine, when and why.
It was a nightmare.
If you want to maximize your returns, take advantage of various deductions, and know what you are getting out of the tax man this year – start your planning NOW!
Take note of all of the money coming into your bank account. Take note of where this money is going, and why (expenses). That way at the end of the year, you can sit down with an expert – and they can help you maximize the tax return and minimize what you need to pay for.