Tax season will be here before you know it. It’s time to start thinking about the ways you can get the most out of your return. Taxes can be tricky to navigate. There are a lot of factors that go into your return, some of which automated tax software won’t be able to pick up on. Before you file your taxes, take a look at the following items to see if you can take advantage of the unique benefits they offer.
Use Tax Deductions!
Many people shy away from tax deductions. Most of the time it’s only because they don’t understand them or didn’t know they qualified. You can deduct charitable donations and unreimbursed work expenses. There is even a deduction available if you’ve moved over 50 miles for a new job. You can claim all the moving, storage, and travel expenses associated with your move. Save all work expense and charitable donation receipts throughout the year so you can receive the right deduction and have the proof to back it up.
Filing early does not have a direct effect on the amount of money you get back. It does, however, expedite the refund process. You may even save yourself some money if you use part of your refund to pay off debt from the holidays. The sooner you pay down the debt, the less interest you have to pay.
Retirement Contribution Benefits
If you contribute to an IRA account, try your best to max out your contribution before the end of the year. You can receive a tax deduction for as much as your maximum contribution allotment. You may even be lucky enough to reap the benefits of a rare “double dip.” If you qualify for a saver’s credit, you’ll receive an additional deduction on top of retirement contribution deduction.
Did you know that family members are not the only ones you can claim as dependents? If you have taken in and supported a friend for the entire year, you could receive a dependent exemption. There are some caveats to this rule. In order to qualify, non-relatives must reside within your home, but relatives do not. In either situation, you must provide for over half of their support. Finally, the dependent must also not make more than $4,000 in taxable income. If you think you may be able to claim dependents, it will not hurt to look into!