It’s that time of year again: tax season! But don’t fret just yet. We’ve compiled some awesome tips to help you maximize your refund and save a little extra on filing your taxes. Whether you are looking forward to a refund or expecting to send the IRS a check, these tax saving tips will help you get the job done.
1. Take advantage of the simple tax-return freebies.
Millions of Americans need to file only a simple tax return (1040EZ or 1040A), but they end up overpaying someone else to do it or fail to take advantage the numerous tax-filing freebies available. Many popular tax-prep companies will offer free use of their services if you are filing only a simple federal or state return, so make sure you check out those options first to save yourself some extra cash!
2. Need to file a complex tax return? Shop around!
There are a lot of choices out there for picking tax-preparation services and software, but don’t let the abundance of options make your head spin. Costs can add up quickly if your return is more complicated, so it’s crucial to shop around before making a selection.
First, establish what you’re likely to need this tax season by referring to last year’s tax return. Next, start to compare prices across tax-prep providers such as TurboTax and H&R Block to score a deal on the software that best suits your tax profile. Right now, you can save up to $20 with an Ebates exclusive at TurboTax.
Make sure the service you choose covers your necessary federal and state filing forms. Lastly, don’t forget to keep an eye out for state and federal tax-preparation bundles to maximize your filing-service savings!
3. Deductions, deductions, deductions.
Taking proper advantage of deductions can add up to some serious savings. Deductions can lower your total tax bill and could mean bigger, juicier tax refunds in April. If you have a job that requires you to purchase special equipment or apparel out of your own pocket, those professional expenses could be deductible. You can deduct charitable donations, too, including the value of any goods you’ve donated to Goodwill or other charities. No matter which tax-prep software or service you go with, double-check that you benefit from all possible miscellaneous deductions, such as childcare-related expenses and healthcare premiums.
4. Boost your tax refunds with credits.
Credits are even better than deductions when it comes to turning your refund into Christmas in April. There are credits available for everything from daycare and college-enrollment expenses for your dependents to home-improvement costs. Become familiar with the credits for which your family qualifies because those credits can add up to an awesome refund year after year.
5. Keep your tax-prep software and guides up to date.
It may seem obvious but keeping your tax-prep materials updated can mean even bigger savings and refunds. Using the latest versions of tax-prep software ensures that you are taking advantage of the current tax law, including all of the latest deductions and credits that may be available to you.
Keep an eye out for updates that include new credits or deductions for things such as energy-efficiency improvements to your home or a new hybrid vehicle. Pay attention to changes in credits and deductions, because losing or gaining either one could have a major impact on your family’s budget. Using a tax-preparation program such as TurboTaxor TaxAct should automatically apply these updates, but double-check that your software is the most updated version. Better safe — and maybe a little richer — than sorry!
6. Timing is everything.
It’s best to file your taxes early for many money-related reasons. First, filing early usually means you will get your refund earlier. Beat the April filing rush, get your refund processed early and all your friends will wonder when you became such a tax whiz.
Second, preparing your taxes early is the best way to avoid a nasty surprise in case you owe the IRS a large chunk of money. Better to discover that bill early rather than the night before taxes are due! Plus, if you figure out how much you owe, you can ask the IRS for an installment payment plan to pay off your bill. Moral of the story? Start early! Once you’ve finished filing, you can go back to binge-watching TV guilt-free because you don’t have to worry about your taxes again until next year!
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