6 Tips for Getting A Bigger Tax Refund in 2018
There’s probably nothing better than getting a bigger tax refund than you were preparing for throughout the year.
Getting money back that you thought was as good as gone can be better than Christmas morning, which is why so many taxpayers try and navigate the system to the best of their ability each year. According to the IRS, about 75 percent of taxpayers received a tax refund of $2,800 during 2015 – but that doesn't include everyone.
If you felt your refund was subpar, check out these 6 tips for receiving the biggest tax refund possible this year:
1. Withholding Increases:
If you’re someone’s employee that means you completed a W-4 form where you indicated how much would be withheld from your biweekly paychecks. The information on that W-4 determines how much money is put towards your personal income taxes each payment period. If you want a bigger refund, contact human resources and change the amount withheld from your paycheck.
2. Donation Deduction:
Did you know you can deduct for charitable donations today? There are a lot of payments you probably made throughout the year that can be classified as a charitable donation. However, if it may seem too good to be true, be careful to check out the restrictions that must be met to qualify these deductions.
3. Work Expenses:
If your job made you pay for something you use at work out of pocket this year, be sure to claim it on your tax return. For example, if you had to subscribe to a professional magazine, or pay dues to some kind of group you joined within your organization, deduct those expenses next year.
4. Filing Status Review:
Sometimes, we go into autopilot and fail to review the simplest parts of the tax return form. For example, has your filing status changed this year? Filing as single, head of household, or married as separate entities or as a joint entity can greatly affect the amount of money you receive with your refund. Through death, divorce, separation, or even a big move, make sure you are receiving all of the money owed to you through your filing status.
5. Family Costs:
Sure, it may be expensive to raise kids today, but you can actually use the expenses your kids racked up over the year as tax deductions. Things like dependent care, or costs associated with taking care of your depend children, as well as parents, can help you claim a much bigger tax refund.
6. Think About Retirement:
One great – and responsible – way to contribute to your tax refund is to invest in your retirement fund, like an Individual Retirement Account (IRA). Your IRA facilitates saving for retirement as well as lowers the total taxable incomes as it comes off the top of your savings. The lower your taxable income, the less you owe in taxes.
Save Your Money
Take the time to really mull over your expenses and payments throughout the year.
You’ll discover that a much larger tax refund is available to you.