As a taxpayer, you might feel a little overwhelmed sometimes when tax season comes up.
No one wants to pay any more than they have to, so you always want to be sure you handle everything just right. When it comes to filing your taxes, there are always ways to come out ahead.
Take advantage of the many opportunities you have to increase your tax refund now and in the future. Check out these tips for boosting your income tax refund potential from now on!
When Does Tax Season Start and End?
First, before we dive into preparing for tax season, you may want to know when tax season is. Tax preparers consider January 1 through April 15 tax season. Employers begin readying your tax information from the previous year in early January, and they must have all documentation sent to you by the end of that month.
By early February, you should have everything you need to file your taxes. You have until April 15 to send them off. Some people prefer getting their taxes done as soon as possible, so they know what they owe and can get a head start on paying. Others delay doing their taxes until the last minute. As long as you file by the deadline, you will be fine.
Make Sure Your Documents Are in Order
Many people work just one job and receive one W2. This means preparing for the tax season is pretty straightforward. But other people may work a gig job and could receive multiple 1099s for their labor. Others may have a side hustle based on cash that requires a lot of documentation. And if you inherited money or sold a home during the tax year, you will need the proper documentation to prepare.
Go through your papers before you begin to ensure you have everything you need. Do this well in advance of the April 15 filing deadline. There's nothing more stressful than realizing on April 14 that you're missing a critical document.
Correct Your Filing Status
Year to year, it's easy to trust tax software that saves your records from the previous year to get everything right this year. However, if you've had any major changes to your life in the time since you last filed, you may qualify for new tax refund benefits.
For instance, if you were married, divorced, or lost your spouse, you may be eligible for a larger refund. Conversely, if you have a spouse that has high medical expenses, is behind on student loan payments or child support, you may want to file separately from them to ensure a higher refund for yourself.
Consider All Your Possible Deductions
The U.S. tax code is complicated, but it also allows you to deduct things that may significantly lower your tax bill. Consider these potential deductions — and make sure you have the right documentation to back them up:
- Home office: If you work at home, you can deduct part of your utilities and other home expenses
- Mortgage interest: You can deduct the interest you pay on your mortgage
Charitable Donations
Do you frequently give your time to charitable purposes? It doesn't matter if you aren't writing fat checks to charities -- if you simply help out those in need (people or animals!), you can add up that time and money you spent and deduct them from your taxes at the end of each year!
Also, in the state of Texas where you aren't required to pay state income taxes, only federal, you're able to deduct the taxes you paid on large purchases -- as long as the tax isn't higher than the state's typical sales tax rate. Remember to list anything major you purchased over the course of the year, and use the IRS website's great tax calculator to help you with your deductions!
Always Claim Anyone You've Been Supporting
If you've had a friend, significant other, or additional family member staying in your home for a while, you may be able to receive a dependent exemption of $4,000!
You'll have to make sure you fall under the specific rules for the exemption:
- A non-relative must have lived with you for an entire year (relatives don't have to live with you to count as dependents)
- A non-relative can't provide more than half of their own support
- A non-relative can't earn more than $4,000 in taxable income
If this applies to you, get paid for your hospitality!
Keep Refundable Tax Credits in Mind
How to increase your tax return when you file your own taxes? Make sure you have taken all the credits you are entitled to enjoy. The federal government offers citizens a number of ways to reduce their tax burden.
For instance, if you have children and you pay for them to go to daycare while you work, you can receive a credit. You also earn credits for education expenses.
The Earned Income Tax Credit is one of the most overlooked tax credits out there. It's worth up to $6,242 for a family with three or more children, yet one out of five taxpayers fail to claim it.
So, when you file your taxes, look over your return to ensure you haven't missed any potential bonuses. If you aren't sure if you qualify, check the IRS's website. You can also consult a tax professional to discuss if you qualify for anything additional.
Declutter Your Life
Make the most of tax season by using it to improve your home. Look around: do you see anything in your home or life you don't need or want any longer?
Odds are there's a charitable organization nearby that would be more than happy to accept items like clothing, books, furniture, electronics, and more.
If you declutter in this way, you can deduct it from your taxes! As long as the value of the items is more than $500, you can file a Form 8283 and receive your deduction.
And on top of your deduction, you can breathe easier without all that unnecessary clutter!
Research the Best Loans for Bad Credit
Tax stress can be draining, even for expert tax minimizers. If you finish filing your taxes this season and feel like you could use a little more cash, you can always consider a personal loan to gain immediate security.
Apply For a Personal Loan Online
That's where Atlas Credit comes in. Contact us today, and we can provide you with an immediate personal loan.
How to Get a Higher Tax Refund Next Year
Alter Your Exemptions
If you're a full-time employee, you undoubtedly filled out an IRS tax form known as a W-4 when you were hired. Depending on how you filled out your form, you'll have a specific amount of money withheld from your paycheck and paid toward your income tax.
On your W-4, you're able to claim certain exemptions. The fewer exemptions you claim, the more money is withheld. If you love receiving a large income tax return each year, one of the best ways to increase it is to reduce the total exemptions you claim. Go check with your HR department and see if you're able to make such changes — then next year's tax return will be significantly larger!
Contribute to Your Retirement Fund ASAP
The IRS actually likes it when you increase the amount of money you put into your Roth 401(k) account each year. If you're employed full-time and your company offers options for your 401(k), you can deduct the amount of money you contribute to it from your income tax.
That money remains tax-free until your retirement, so it's by far one of the easiest ways to guarantee better financial results for your future.
Invest in Green Home Improvements
Another one of the ways to increase your tax return that some people don't know about is to invest in energy-saving home improvements around your house. The government encourages such upgrades by offering you tax credits when you switch to more efficient systems. Consider some of these changes:
- Solar water heaters
- Solar electric systems
- Wind energy turbines
You can get a personal loan to finance these upgrades and save money on your taxes. You will also reduce your energy bills, which can lead to additional savings for many years to come.
Unexpected Concerns
Sometimes you need more than just a few ways to boost your tax refund potential. If you just found out that your tax season is going to be a lot more expensive — or that you'll simply be receiving a far smaller refund than expected — you might benefit from a quick and easy personal loan from a lender like Atlas Credit.
Even if you have bad credit or no credit at all, we can help! Apply online or in-store at one of our many Texas, Virginia, and Oklahoma personal loan locations to see if you qualify.
