You work hard for your money all year round, so why would you want to simply throw it away at tax time? If you’re filing incorrectly, that’s exactly what you may be doing. Our team of tax professionals work hard to ensure you receive the highest return possible when we prepare your taxes. We help you keep more of your money in your pockets! We’re so dedicated to helping you save money that we’ve put together an awesome little list of 5 ways you can keep more of your mula.
Make contributions to your retirement accounts. The IRS allows you to make contributions to your IRA until the filing deadline (April 18, 2016). You may be eligible for a tax deduction of up to $5,500.00 ($6,500.00 for individuals over 50). In addition to that, you may also qualify for the saver’s credit where the IRS gives you an additional $1,000.00 ($2,000.00 for married couples filing jointly) when you contribute to your retirement.
Document the taxes you’ve paid throughout the year to help you avoid overpaying your taxes. The taxes that you’ve likely been paying all year long include; income taxes (state and local), real estate taxes, and personal property taxes.
Keep your receipts and itemize. There are tons of deductions that you may be able to file to help reduce your taxable income. The government will allow you to take the standard deduction to help you lower your tax burden, but you may be able to do yourself one better by itemizing your deductions. Including items such as job search expenses, charitable contributions, and unreimbursed business expenses can help you reduce your taxable income, resulting in a bigger tax return.
Take above-the-line deductions (must be eligible). Above-the-line deductions provide some tax payers with another way to reduce their taxable income. These deductions may also help you maximize your Advanced Premium Tax Credit (for those who received assistance with paying for insurance in the health insurance marketplace). Above-the-line deductions include items such as alimony paid, self-employment tax, purchasing school supplies, and paid student loan interest.
Take advantage of refundable tax credits. Tax credits directly reduce your tax liability as opposed to reducing your taxable income (deductions). Refundable tax credits can be greater than your tax liability in which case the excess will be paid to you, the filer. Many people take advantage of common tax credits, however, there’s a large number of people who aren’t aware of the tax credits that they may be eligible for. For example, many people miss the opportunity to benefit from The Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) because they do not file or they’re unaware of their eligibility due to a recent change in income or family size.
Whether you’re filing on your own or hiring a trusted professional (i.e. our Tax Express and Loans tax pros) you should be aware of these basic adjustments that can help you maximize your return and help you start your year off right!
Ready to file? Great! We’re ready to max your return. Let’s work.