4 Excellent Ways to Boost Your Tax Refund Come Tax SeasonApril 29, 2023
Come 2021 tax season, you will file your taxes for the 2020 tax year. Once you put your tax returns together, you will know whether you will get a tax refund or a tax bill. In most cases, you can get a tax refund, and there are various ways you can use to boost the tax refund. Here are 4smart ways to increase your tax refund.
1# First, choose the most ideal filing status
If you are married, you can choose to file your taxes separately or jointly. The status you pick will affect your standard deductions, credits you are eligible for, and even the amount of taxes you pay to the IRS. You need to calculate the tax refunds using all the filing situations using the 2020 tax brackets filing jointly as well as tax brackets for filing separately. Afterthe calculations, you can go for the filing status that gives you more tax refund.
2# Claim tax credits you qualify for
The IRS offers tax credits to help ease the financial burden that comes with paying taxes. You need to claim earned income tax credit available to moderate as well as low income earners. Also, you can claim child and dependent care tax credit, energy-saving home improvement tax credits, child tax credit, American Opportunity Credit, among other credits you qualify for. The tax credits will significantly reduce your taxes bill, and even allow you to get a tax refund. Claiming all the tax credits you are eligible for will help boost your tax refund.
3# Embrace tax deductions
There are many tax deductions you qualify for, but because you are not even aware of them, you don’t include them when filing your tax returns. Some of the deductions you overlook can make a significant difference on the amount of tax refund you get. Some of the deductions include state sale tax, out-of-pocket charitable contributions, student loan interests, mileage expenses, medical expenses deductions, among others. Embracing these tax deductions will ensure you save big on taxes, which can boost your tax refund.
4# Perfect timing for contributions or payments
If you make payments or contributions just before December 31 or in the last quarter of the year, you can boost you tax refund. For instance, if you make January mortgage payment just before 31st December, you can get added interest on your mortgage interest deduction. Also, if you go for treatment or schedule a health examination in the last quarter of the year, you will increase your medical expense deduction. In addition, making charitable contributions can be of great help. All these, including making contributions to your retirement plan will boost your tax refund.
Come tax season, you need to learn the tricks of how you can boost your tax refund. Consider the above ways, and remember to use IRS tax brackets for the tax year when doing the calculations, and you will easily know how much the IRS owes you. Don’t forget to file your taxes early enough to ensure you get your tax refund within a few days.