It’s tax season again, and that means you are probably thinking of how to maximize your tax refund to get the best return possible. The tax experts at Engineered Tax Services (ETS) can always help you with your specialty tax options, but there are also some other tips and tricks to consider prior to doing your taxes.
Consider Your Filing Status
It is important to consider your filing status when trying to maximize your tax return. For example, if you are married, you may be used to filing jointly. However, this is not always in the best interest when it comes to your tax refund.
Tax experts recommend considering how much your tax savings would be under both circumstances. This is because the Internal Revenue Service (IRS) uses a percentage of adjusted gross income (AGI) to calculate whether deductions (i.e. medical or other miscellaneous deductions) can be used. If your spouse has a lot of medical expenses, for example, filing separately can allow he or she to reach the necessary AGI percentage based on his or her income.
Choosing to file separate returns is not always the way to go, however. So, in order to maximize your tax refund, you must weigh both sides to see the potentials.
Remember Your Tax Deductions
Throughout the year, you may have done some philanthropic work or taken a job that is over 50 miles away from your home. The cost of tolls and miles represent tax deductions that you can take advantage of. Do not forget to keep all your receipts in these cases. Having good travel records can help you to reach the necessary minimum AGI percentage for miscellaneous deductions. Also, don’t forget to keep track of your charitable deductions. These can help you maximize your tax refund as well.
Maximize IRA Contributions
You can claim the credit on your return, and you have until April 15th to open a traditional IRA for the previous tax year. You can take advantage of the maximum contribution. Also, if you contributed to a Roth IRA, you may be able to claim the retirement savings contribution credit. That’s the credit that lowers taxable income and results in maximizing your tax refund.
Watch the Clock
It is important to keep track of time in order to maximize your tax refund. For example, if you pay your January mortgage payment before December 31st, you can get the added interest for your mortgage interest deduction. Also, if you schedule your doctors’ appointments and exams in the last quarter of the year, you can increase your medical expense deduction.
In the Know
Tax laws change frequently, as we have seen with the recent tax reform. Rules, regulations, and credits come and go. So, staying “in the know” can be to your benefit. By keeping up with tax changes, you can plan for the future and maximize your tax refund this year.
For more information about how you can maximize your tax refund, please contact Engineered Tax Services at (800) 236-6519.
Don’t forget that ETS is the largest specialty tax firm in the United States with the best team to help you maximize your tax savings. We’re happy to help you by performing cost segregation studies, R&D tax credit studies, filling you in about energy incentives, and state and local tax incentives. There are so many specialty tax incentives that can affect your tax savings. These will, in turn, help you to maximize your tax refund.