Preparing and filing taxes is never fun. It’s often a long, boring process, and if you’re not familiar with the ins and outs of tax preparation, you could be making mistakes leading to a decrease in your tax refund.
Most people think that a tax refund is simply an amount set in stone, but this isn’t true. You can actually take certain measures in an attempt to raise your tax refund.
Choose Your Filing Status Carefully
When filing taxes, you will come across the option to file as married or single. You can file your taxes together with your spouse, but this isn’t always the best option. There are certain situations where filing separately may be more beneficial. If one spouse struggled monetarily the previous year or had substantial medical expenses, they may receive a larger deduction by filing on their own. It can also help when claiming children on your tax return.
Keep in mind that deductions available for joint filers won’t be available if you file separately. There are ways to calculate your possible deductions both ways to compare which way to file is most beneficial.
There are ways you can increase your tax refund by simply keeping track of time. Scheduling health treatments and exams near the end of the year can increase your medical expense deduction and donating to a qualified charity before the new year can add to your refund. You can even get additional interest for your mortgage interest deduction if you pay for January before the last day of December.
Know Your Options
A lot of tax complications come out of simply not knowing what options are available. Some people pick whatever is recommended on their tax forms and end up missing out on large deductions they qualify for. For example, college students or those supporting college students can receive certain education credits. Homeowners that make home improvements to save money can also qualify for tax credits.
Also keep in mind your HSA (Health Savings Account) contributions to lower the taxable amount of your income.
Other possible tax deductions include:
- Charity Donations
- Child Care/Dependent Care
- Jury Duty Fees
- State Sales Tax
Don’t be afraid to hunt for ways to save money on taxes and bulk up your tax refund. If you aren’t sure where to start, you can always speak to a professional tax preparer for guidance.