Getting the Most Out of Your Tax Returns
With tax season comes tax returns. And with tax returns, it’s better to take all steps necessary and appropriate to get the most out of your tax return and get a nice refund.
Part of getting the most out of your tax return is avoiding mistakes, decreasing your chance of getting audited, and using those key deductions and credits to lower your bill or event get a refund.
To get the most out of your tax return, take the extra time to avoid mistakes. This will help you get your refund sooner and without delay.
One mistake to avoid is failing to report your entire income. It’s becoming harder and harder to squeak unreported income past the IRS, thanks to its sophisticated computer programs and dedicated agents. Also, don’t lose important records. If you claim deductions or credits, not having the records could mean that claiming them may become just wishful thinking.
When doing your taxes, take the time to enter your information correctly. If you enter the wrong social security number or make a mathematical error, your refund will take longer to get processed and issued.
Lowering your odds of getting audited is also important for getting the most out of your tax return.
Getting audited will not only cost you a probable tax penalty, it’ll cost you countless hours of time and energy getting documents in order, and meeting with IRS agents.
Making multiple, large cash transactions is a red flag for IRS agents looking for someone to audit. Car dealerships, banks, casinos, and other big businesses are required to report cash deposits or cash payments that, in total, add up to big bucks.
Also, make sure to report all of your income. The IRS compares the tax returns of those who receive and make sizable payments, so make sure there’s no inconsistency or an IRS agent may find out about them.
Getting the most out of your tax return also requires you to use the deductions and credits that will get you the biggest return.
There are a variety of tax deductions and credits that can be used. If you own a home, make sure to use the deduction for your mortgage interest. That can reduce your reportable income by up to thousands of dollars. If you’re paying off student loans, the interest is also deductible.
If you’re a parent, childcare expenses are also deductible. You’ll have to have two children in childcare under the age of 13. The costs of performing charitable work can be deducted as well. That can include the mileage it takes to drive to a nonprofit volunteering event, or purchases for supplies.
Moving expenses are also deductible if you moved somewhere for work. The new location must be at least 50 miles away from your old home. If you were looking for work during the tax year, job hunting expenses can be used to help out at tax time. This includes employment agency fees, resume printing and mailing costs, and costs for staying overnight in another town for a job interview.
There are other deductions and credits to use, so don’t hesitate to be creative in searching for them.
Being creative and accurate is key to getting the most out of your tax return. It may be a small amount of work now, but the payoff can lead to a big refund down the line. If you’re looking for a tax professional or tax attorney to help you get there, check out our website.