Taxes can be a pain, but getting a refund check in the mail can make it worth the trouble. Whether you want to save your tax refund or spend it in on something you or your family needs, everyone wants as much money back as they can get. There are many ways you can increase your refund for tax season 2021, and we’re here to help.
If you file early, you have additional time to get your tax filing information in order, which will help you be more organized and have a better possibility of getting a bigger refund. Waiting until the last minute can leave you scrambling to get things together, and you may miss out on refund possibilities. File early, and be organized and efficient. Your tax refund will thank you.
Filing status greatly affects your tax refund, so you want to make sure you are filing the correct one for your situation. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er) with Dependent Child. Research which status fits and will give you the best possible refund. If you are unsure what the best option is, consider consulting a tax professional.
Although documenting all medical expenses and doctor’s visits can be monotonous and tedious, it can help you get a better refund. Many expenses have the potential to be tax deductible. According to TurboTax, the IRS authorizes you to deduct medical costs that are more than 7.5 percent of your adjusted gross income. However, any expenses that are reimbursed to you, most likely from your insurance or employer, are not tax deductible. Nonetheless, keeping track of all medical costs will prove beneficial to you not just for this tax season, but for all tax seasons to come. Go through your medical bills and receipts carefully, and find everything that has the potential to be deducted.
Contributing to charity is a win-win. It helps someone in need, and helps you get a better refund for tax season 2021. Similar to medical expenses, make sure to keep a detailed record of your donations, and ensure that it is a qualified charity in order to receive such a deduction. You can look into additional tax-saving tips for charitable contributions to ensure you are receiving all of the possible deductions.
If you contribute to a 401K either individually or through an employer, Credit.com explains that “your contributions are made with pre-tax dollars, which helps lower your taxable income for each tax year you contribute to the plans.” Investing in your future is not just a long-term benefit; it can benefit you as early as tax season 2021.
Did you know you can claim someone as a dependent you have been supporting, even if the dependent is not your child? U.S. News explains that dependent exemptions of $4,000, deducted from your income, are possible if you have been supporting someone for the entire year, he/she is unable to provide more than half of the year’s income, and any income earned is less than $4,000. So, make sure to take advantage of this tax break if it applies to you!
February 24th, 2020
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