As the refund season comes, taxpayers are filing their taxes to get their tax refund. While some taxpayers think that they deserve the tax refund they got the previous year, others think they could have received more. Those who use tax software may not be able to the most out of credits and deductions because such software reminds them of tax credits and deductions that may have surprised them. If you want to get a big tax refund, here are some helpful tips.
Do the Filing Early
Doing an electronic filing with direct deposit sooner allows you to get your tax refund sooner. You will find the money useful if you have debt from the holidays. When you get your tax refund earlier than the usual tax refund dates, you will be able to pay down your debt earlier and free yourself of extra charges.
Choose to Itemize your Deductions
Although you can take the standard tax deduction to decrease your taxable income, try to take some time collecting some of your receipts. This can help you itemize your deductions to get a larger refund. For some extra expenses like casualty losses, charitable contributions, job search expenses as well as local and state sales tax deduction, you may be pushed to take the standard deduction.
Consider Refundable Tax Credits
Tax credits are a reduction of the tax you owe and the refund you get within tax refund dates from the credit is the amount beyond your tax liability. You may be eligible for the Earned Income Tax Credit which is worth up to $6,242 if you have a family of at least three kids.
Make Retirement Contributions
You can contribute to the IRA and enjoy the tax deduction benefits of up to $5,500. Apart from such deduction, the saver’s credit is also something to take advantage of. This is the only time you can double dip with permission from the IRS. You will be provided with an extra credit of up to $1,000 when you make retirement contributions.
Consider Above-the-Line Tax Deductions
This option lets you decrease your taxable income without the need to itemize your deductions. Items like school supplies, alimony, self-employment tax and student loan interest payments are examples of these deductions. Also, the decrease in your taxable income may help in getting a larger Advanced Premium Tax Credit when you get assistance for helping pay for insurance in the insurance market.