When you think about tax season, what comes to mind? For many, it brings up visions of paperwork, financial documents, audits and other scary themes.
But if you’re expecting a refund, tax season can be exciting. Your refund can be used for a variety of purposes. You could pay down debt, buy something fun for you and your family, and more.
With a little preparation, you can maximize your refund so you’ll have more money to spend on the things you want or need.
Here are some steps you can take to make sure you’re getting the most from your tax refund this year.
This one is simple. The less you spend on tax prep, the more you’ll have to spend on other things once you get your refund.
Many online tax prep services offer free filing for simple returns. Or you may be able to get free tax prep through the IRS’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE). Visit the IRS website to learn more about these resources and if you qualify.
Most of these offers are loan products with high interest rates and fees, which could greatly reduce the amount you get for your refund. If you direct deposit your refund into your bank account, it can come as soon as seven to 10 days after you file, so it’s worth the wait.
Have the Veridian routing number and your account numbers handy when you file so you can set up direct deposit for your refund.
Your tax filing status can significantly impact your refund. The five statuses are:
• Single
• Married Filing Jointly
• Married Filing Separately
• Head of Household
• Qualifying Surviving Spouse with Dependent Child
Make sure to use the correct filing status to maximize your refund.
Tax deductions reduce your taxable income and can move you into a lower tax bracket. When you miss out on tax deductions, you leave money on the table.
Some of the most popular ones include:
• Earned Income Tax Credit
• Child and Dependent Care Credit
• American Opportunity Tax Credit
Check out this list of deductions from the IRS so you can be on the lookout for the right documents.
Year-end tax moves can reduce your taxable income and earn you a bigger refund. Consider making additional contributions to your retirement accounts, health savings accounts and other tax-sheltered accounts before you file.
To make sure you’re getting the most from your tax refund this year, make sure you start exploring your options today. Click the button below for more tips on filing your taxes this year.