8 Easy Tips To Boost Your Tax Refund
With tax season in full swing, it is time to get all of your paperwork together. The best, and potentially worst part about taxes is the tax refunds. We all look forward to our tax refund and the things we can do with that money. But it isn’t always a guarantee that you will receive a refund. There are plenty of people that actually have to pay back the money they owe to the IRS. Talk about a nightmare. But not all is hopeless. There are a ton of tips and tricks that are easy to follow and will help to boost your tax refund this year.
Pick Your Filing Status Carefully
When picking your filing status, it is important to know what your status is. Whether you are filing single, head of household, or married but filing separately can make a big difference. Your filing status determines what tax bracket you fall in – and your tax bracket determines how much tax refund you get back.
Include All Of Your Deductions
Whether they are charitable contributions, getting a title loan for an emergency, or interest payments on your mortgage, all of these are expenses that can be deducted. Deductions get taken out of your gross income, which then lowers your tax. The lower you have to pay in taxes, the higher your refund will be.
Don’t Withdraw From Your Retirement Account
It may be tempting to withdraw from your retirement account. Especially if you are going through a tight financial situation, dipping into your retirement can seem like a good solution. But the tax impact can be pretty hefty. There are ways to make sure the tax impact isn’t too great; you just need to do your research before you make any withdrawals.
Don’t Be Reckless Or Greedy
It could be tempting to minimize your taxes to maximize your refund. That, however, can make you lose focus and be reckless. Especially if you decide to go to a professional that uses incorrect methods to file your taxes. You also shouldn’t go overboard with deductions. Instead, save your receipts and your company’s reimbursement policy to support your deductions.
See If You Qualify For A Health Savings Account
If your health insurance includes a high deductible, you may be eligible for a Health Savings Account. An HSA is an account you can set aside money in. Much like retirement accounts, you can make contributions. Of course, you have until the due date on your tax return to make contributions to your HSA.
Report Every Type Of Income You Have
You can’t hide anything from the IRS. You need to report any income you receive because, if you don’t, you will have penalties with interest in unpaid taxes. Don’t give yourself the added headache of having to pay back the IRS so much money. Even if it is an honest mistake, you will still be penalized. Make sure you are truthful and report every income you have.
Don’t Miss The Deadline
The deadline to getting your papers filed and taxes paid are two very important things to meet. When you miss this deadline, you get penalized five percent of your unpaid taxes – a steep price for missing your deadline. So even if you were supposed to get a refund, you’ll end up getting penalties instead.
Push Your Income Into Next Year
If you are financially stable, you can push your income into next year. You can cut your taxes in half and have an entire extra year to pay the tax bill if you push your income from December into January. But this will change if the tax rates are not the same year to year. So, before you do this, make sure to do your research.
When it comes to your possible tax refund, it can be a stressful wait to see if you are due a tax refund or if you possibly have to send money back. A tax refund can really get someone out of trouble they may be experiencing. There are plenty of ways to get your tax return cash quickly, but there is still no guarantee you will get any. But, with these tips and tricks, you can make your chances so much better to get the tax refund that you deserve and work hard for. So, don’t mess up and lose money. Instead, follow these tips to easily boost your tax refund this year.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.