Seven Tips to Increase Your End-of-Year Tax Refund
Tax season is right around the corner. Now is the time to get your finances in order to help your tax filing process run smoothly. For anyone who is interested in maximizing their tax refund, here are seven tax tips to help you take full advantage of programs at your disposal and maximize your return.
Continue Your Education
In today’s competitive job market, it can often be difficult to set yourself apart from your peers and land a promotion to the next level. Taking a class is not only a great way to make your resume shine, but it can increase your tax refund. The Lifetime Learning Credit offers students a tax credit for qualified tuition and expenses related to higher education costs. There is no limit to the number of years you may claim this credit and it may even be worth up to $2,000 on your tax return.
Clean out Your Closet — Boost Your Return
Charitable contribution deductions can help significantly lower your tax burden while helping those in need. To take full advantage of this benefit, you must itemize deductions on your form 1040 instead of opting for the standard deduction. Currently, individuals can contribute up to 20 percent of their annual gross earnings to charity per calendar year. This has the benefit of lowering the amount of income you claim on your taxes and could translate into huge savings.
Call A Professional
If you find yourself overwhelmed by the complexities of your unique tax situation, it is sometimes necessary to seek out a qualified professional to assist. Tax professionals are frequently able to make great recommendations that you may not have even considered. This allows many people to capitalize on opportunities to save and maximize refunds.
Bonus Deferment
If your employer is in a giving mood this year, you may find yourself the recipient of a bonus. Although this extra income can give your checking account a much-needed boost, it frequently bumps workers into a higher tax bracket. If you fall into this category, employers will often work with you to ensure your bonus pays out at the start of the new year instead of at the end of the tax year.
Deductions for Your Home Office
If you use a room in your home for the sole purpose of running a business, you may be eligible for a deduction on your taxes. This deduction is available to both homeowners and renters. There are multiple methods to calculate this deduction, but most commonly, deductions related to a home office are based on the percentage of the home devoted to use in your business.
Plan for Your Retirement
Planning for retirement has become an absolute necessity in today’s fiscal environment. Not only is tax season an ideal time to revisit your financial strategy, it is a great opportunity to look into individual retirement accounts, or IRAs. IRAs allow you to both reduce your taxable income and tuck money away for your future.
This simple tips can help ensure that your tax season is a cause for celebration this year! For professional help with your taxes, contact Clear Accounting Solutions to learn about our in-person and online financial services.
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