While you may have your own opinions regarding how the American government spends your tax money (or doesn’t spend it), there is one thing you will agree to: let’s maximize tax returns.
In simple terms, maximizing tax returns means that you can opt for certain tax credits and deductions based on the nature and amount of your earnings and any other-than-usual payments you’ve made thus far. You’ve still got a while till IRS starts accepting filed returns for income taxes (January 29th 2018), so take some time out to learn about these tried-and-tested ways of getting the most out of your tax returns.
Re-Think Your Filing Status
Your filing status is one of the first factors you address when filing tax returns. It’s also the first factor you should pay attention to in order to boost your tax refunds.
For instance, most couples will file their tax returns as a joint unit—more than 95% of married couples do. While doing so is a lot less complex than going for separate tax returns, it’s also the route less likely to be financially beneficial. Each spouse becomes liable for the other’s finances, and there is a good chance that one half of the married unit may lose out on maximizing tax returns due to the other’s “surprising” financial habits.
In short, let’s keep tax filings out of the for-better-or-for-worse scenario, and avoid risking losses for your entire house hold by opting for “married filing separate”.
Don’t Hold Back On Tax Deductions
In life, you make certain expenses that qualify for reductions on your income tax—that’s deductions in a nutshell for you. Some common examples of these types of expenses include:
· Travel expenses
If you’re travelling away from on work assignments, job-hunting, volunteer work, medical appointments, save your bus/taxi/parking/toll receipts—because these can add up to the expenses that are applicable for tax deductions!
· Professional membership fees
You might be paying these fees and dues to maintain your professional certification, membership in a business league, or one in a public or civic organization. You can file these as deductibles in your tax returns.
· Charitable contributions
Maintain an accurate record of the expenses you made for charitable causes, such as cost of the baking ingredients you bought for a local fundraiser, or items you bought for donating to the Salvation Army. Make sure to save ALL receipts for these expenses, as these are required by the IRS for verification.