Tax refund time can be a way to pay for that big splurge, pay down debt or even increase your savings. However, many taxpayers may be surprised by the size of their refund. If you have ever wondered if there were ways to increase your tax refund, here are a few tips that can assist you to maximize your refund. However, it is important to consult with your tax professional or accountant, such as Allan, in Forest Hills, NY, to determine the best methods for your unique circumstances. Here is an overview of some of the methods they may recommend.
For many individuals, part of their charitable giving occurs in the form of tangible items, such as clothes, food and cash. You want to keep careful track of these donations throughout the year, as they can provide a source of deductions for your return. Keep in mind, the donations must be made to a 503(c) registered non-profit to be eligible. In addition to all the previous mentioned items, you can also deduct travel expenses in the form of mileage for errands run for the non-profit. Therefore, you need to keep careful records of these miles, as well as any parking or tolls. For all donations, you will need to keep your receipts. There may be a ceiling on how much you can deduct, so be sure to consult with your tax professional.
Throughout the year, you may have union dues or other expenses for subscriptions that are not reimbursed by your company. Keep the receipts, as they could be deducted. Additionally, if you are not reimbursed for any equipment or its maintenance, but you need it to perform your job, then that too may be deductible as a professional expense. Keep in mind, if your boss reimburses you, then the expense is not deductible. But if you do not receive any reimbursement, then you need to also track any mileage, parking and tolls for errands and job related activities beyond the standard commute. These may also be deductible, but you will need to consult with your tax professional to determine what expenses can be counted and if there are any percentages that apply before you can take the deduction.
While various taxpayers will file primarily as single or married filing jointly, there may be benefits to reviewing your filing status, especially if there have been some life changes throughout the year. Some of these could include divorce or death of your spouse. Therefore, you will want to consult with your tax professional to determine what is the correct filing status for you.
When you are first hired at a new position, you typically complete a W-4 tax withholding form. When completing this, you are essentially determining how much your employer will be taking out of your check each pay period for taxes. You can opt to increase the amount withheld by reviewing your exemptions and opting to take fewer of them or none at all.
Just keep in mind that this will also reduce your paycheck, as fewer exemptions means more tax taken out. However, that also means that your will be eligible for a larger refund, once your tax return takes into account your exemptions, credits, deductions and dependents. It is just important to make allowances for the slightly lower take home pay throughout the year.
Your family obligations, including alimony, may be tax deductible. Keep track of all those child expenses throughout the year as well, including daycare, after school care and even healthcare. Medical expenses for your dependents are deductible for a variety of items, including doctor’s visits, co-pays, prescriptions and your portion of any hospital visits. So keep track of those expenses throughout the year and bring them to your tax professional. They will be able to assist you in determining what you can deduct and what might not be eligible. Also, if you are caring for aging parents, then you will want to be sure to keep track of any expenses in relation to that care as well. While there are percentages and eligibility requirements, you may still find that those additional deductions can add up to a much larger refund.
Remember, though, that getting a bigger refund can often mean that you have given the government an interest free loan. Therefore, it might be worth considering have an amount taken from your check and put in a savings account, versus paying additional taxes.
Click on the link below to connect with a tax professional at Allan J Rolnick in Forest Hills, NY, to find the best ways to increase your tax refund this year!
