Tax season can feel overwhelming since it directly affects your income. Even because, there are some times that tax bill can surprise you more than you’d imagine. But it doesn’t have to be that way.
Although everybody has to pay taxes, there are legal recommendations so you don’t have to pay more than you owe. By the way, you can be able to save more money with some easy tips when tax season comes. Follow now the best accounting advice to file your taxes like a pro!
1. Include work-related expenses
It’s possible to deduct professional expenses from your taxes (make sure to keep a receipt). Some items that could be deducted are equipment and professional dues not covered by your employer. For more information, consult with an accountant and take advantage of companies such as Turbo Tax. Alternatively, visit irs.gov and consult the list of deductions and credits.
2. Donate to charity
Your donations are deductible. This includes cash as well as food, clothes, real estate, mileage, electronics, and other items. You can calculate the deduction amount on sites such as Turbo Tax. All you have to do is ask the organization to give you a receipt. You can also deduct your out-of-pocket expenses for your work as a volunteer, such as gas. Be aware of the restrictions, though. The non-profit is eligible if they can prove 501(c)(3) status. This information is on the organization’s website.
3. Give a gift to your loved ones
This is for real. In addition to donating to charity you can also deduct gifts up to $13,000.
4. Change your W-4 tax form
The W-4 is a form to your employer and can generally be changed at any time. The form determines the withheld amount from your paycheck and it depends on your claim exemptions. The withheld amount applies towards your personal income taxes. In case you prefer to maximize your refund, consider reducing the exemptions you claim on your IRS tax form W-4.
5. Consider filing your taxes separately from your spouse
You may reduce your tax bill significantly if you and your spouse file separate tax returns. Your filing status is an important factor that determines your refund. Some of the categories are single, head of household and married (filing separately or jointly). In most cases, it makes more sense financially for married couples to file taxes jointly. However, this is not true for everybody. Some couples get a larger tax refund if they file separately. Consult with a professional if you are not sure what is best for you.
6. Become an entrepreneur
Business owners can declare certain costs as company’s expenses, which may reduce their tax bill as a result. There are many factors that should be into consideration. Consult with a professional if you think this may be an option for you.
7. Don’t forget your kids (and parents)
There are a number of ways you can deduct dependent care expenses. Examples include the child tax credit and healthcare expenses. Consult with a professional to learn more.
8. Invest in your children’s future
Creating a 529 college savings account for your children is a great investment option. As long as you apply this money towards higher education, you can benefit from a tax-free investment. Find your state’s deadline and policies to explore if this is an option for you. Another option is a retirement investment account.
9. Contribute to an IRA
This is a great option because you reduce your tax obligation while investing in your future. Contributions to individual retirement accounts can be a good one in many cases. However, keep in mind that there is a deadline and a limit based on how much you make.
10. Get professional assistance
- Turbo Tax is a user-friendly software service to file taxes online. This is one of the easiest ways to file your taxes. Turbo Tax identifies over 350 tax deductions so you can get the biggest refund possible. In addition, every detail in your tax file is going to be under review. That is 100% accurate and you will not have to pay any penalties. They also offer other products such as a credit score check and a live assistance with a CPA or EA. Other tax services that we recommend are Liberty Tax Service, H&R Block, and Tax Act.
Another good thing of professional assistance, is the possibility to have your money back. These recommended services listed above give cash back if you purchase through Lemoney.com.
Lemoney offers the best cash back rates you can find online. The best part is that you earn rewards when you invite friends. All you have to do is become a member and go on the following links. Turbo Tax, Liberty Tax Service, H&R Block and Tax Act.
Some of us may disagree on how much money should go to each expense. However, who doesn’t like to save money, right? Consult with a professional to ensure the best options for you manage your tax bill properly.
Many people miss deductions every year. Don’t be that person.