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6 Tips for Maximizing Your Tax Refund
Maximizing your tax refund may seem daunting, but with the right plan of action and a few simple tips, you can get the most out of your hard-earned money. Learn how to make the most of your taxes today and find out 6 key strategies for maximizing your tax refund.
Be Aware of Tax Deductions.
Knowing which tax deductions apply to your particular situation is key to adequately maximizing your tax return. When filing taxes, identify any deductions you may be eligible for to lower your taxable income, such as those related to charitable donations and medical expenses. Additionally, check the IRS website for special tax credits that could increase your refund amounts, such as the Earned Income Tax Credit and the Child Tax Credit.
File Early and Avoid Risks.
The IRS recently announced that Form W-2 and other wage statements deadline is coming up for employers on January 31, 2023. Filing your taxes earlier is a great way to avoid additional risks and ensure you will receive the maximum refund due to you. When you file sooner rather than later, it gives the IRS time to process errors or verify any discrepancies that may arise in your return. You’ll also be one of the first in line for your refund (electronically) as soon as it’s available – meaning you can get access to your money sooner.
Research Refund Opportunities with the IRS Tools and Apps.
The IRS provides tools and apps to help you maximize your refund opportunities. These tools include the Tax Withholding Estimator, which allows you to calculate how much should be withheld in taxes from each paycheck; the 1040 Central mobile tax app, which helps you check your refund status and stay organized; the Foreign Student Refund Calculator, which is designed specifically for foreign students with U.S. income; and more. Take time to review these helpful resources and ensure you’re taking full advantage of every tax loophole available to provide maximum savings on your taxes come to Tax Day!
Utilize All Allowable Credits and Deductions.
One surefire way to maximize your tax refund is to make sure you’re taking advantage of all available credits and deductions. Look into credits such as the Earned Income Tax Credit, Child Tax Credit, Residential Energy Credits, Student Loan Interest Deduction, State and Local Tax Deduction, and any other qualifications that may apply. Reviewing which credits and deductions you qualify for can save you hundreds or even thousands of dollars in taxes owed.
Word of advice from us is to ensure that you do not take more deductions than you are entitled to. Forbes reported that The IRS continues to target those making less than two times the national poverty level and not millionaires. This means you need to be sure the deduction you are taking applies to you.
Take Advantage of Tax Filing Software to Help You Get Organized and Calculate Your Refund Accurately.
Using tax filing software to document and organize your taxes can help you take advantage of all available credits and deductions. The software can also help you accurately calculate your refund and save time when filing online. In addition, many of these services have customer service teams who can answer your questions or provide assistance if you don’t understand or need help. Filing your own taxes may not be for everyone, but if you are doing it, it can save you money in the short and medium term.