Tax season is here! While most of us may disagree on how tax money is spent, we all have one goal in the end— receive the biggest refund possible. Before you run to a finance company or log online to file your own taxes, review these tried and true ways to increase your refund amount.
Your W-2 should be delivered soon! The sooner you e-file with direct deposit the sooner you will receive your tax refund.
Deduct all Donations
The IRS allows you to deduct up to 50% of your taxable income in charitable contributions to tax-exempt organizations.Those include religious organizations, community groups, charitable organizations, colleges, nonprofit hospitals and more. Deductible contributions include money, personal property, stocks and securities, and even expenses incurred while volunteering.
Bonus tip: to track your donations throughout the year to help maximize your deduction for cash, non-cash and recurring donations at tax time, download the Donation Assistant® by TaxAct.
If you pay out-of-pocket expenses related to your job — and your boss doesn’t reimburse you — you can deduct those costs from your taxable income.
Examples include cell phones and laptops used for work, dues to professional organizations, uniforms and work clothes that you don’t wear off the job, and mileage traveling to meet clients (daily commute doesn’t count).
Don't Forget Family Obligations
You can deduct a number of expenses related to your immediate and extended family. If your child goes to daycare so you and/or your spouse can work, you can deduct the daycare costs from your taxable income Childcare Network Tax Statement week was January 9-13. If you haven't received yours, please request one from your school director! The same is true for expenses related to the care of an elderly parent or relative. If you pay alimony to an ex-spouse, that’s deductible, too. Many out-of-pocket medical expenses for your family are deductible, but not health insurance premiums.
Increase IRA Contributions
You can deduct all contributions to a traditional IRA if you are not also covered by a retirement plan at work.
The annual contribution limit in 2015 is $5,500 ($6,500 if you’re over 50). Note that higher income earners can only deduct a portion of their IRA contributions.
Refinance your Home
The IRS allows you to deduct all interest paid during the year on a home mortgage.
By refinancing your mortgage, you restart the payment process, meaning that a greater part of each mortgage payment is pure interest. More interest means more deductible income.
Be Aware of Current Tax Laws
Congress is always tinkering with the tax code in order to encourage different types of positive economic and social behavior. For example, you can earn tax credits by making energy-efficient upgrades to your home or buying a hybrid vehicle.
Home Business Decuctions
If you run a small business out of your home, you can deduct portions of your home expenses used exclusively for the business, like Internet service, telephone service and even the percentage of the mortgage or rental payment taken up by your home office.Tax Act