If you want the largest refund possible this year, then I highly recommend you schedule your appointment with us today if you haven't done so already. The sooner we can file your taxes for you, the sooner you'll receive your refund.
That said, here are five tips to help you maximize your tax refund.
Take Advantage of Pandemic Relief Measures Even if you received your stimulus payments, you still might be able to claim more in the form of a recovery rebate credit, which can increase the size of your refund. Also, if you are self-employed and were sick, quarantined, or taking care of a family member, there are other tax credits you may claim. And, if you took a withdrawal from your retirement account under the CARES Act, you might be able to waive the penalty. In general, if you were impacted by the events of 2020 (and most of us were), then there are tax implications that may be to your benefit. Give us a call so we can discuss.
Itemize Your Deductions Although the standard deduction was raised and more are opting to take this deduction over itemizing, you still might want to consider going the route of itemizing your deductions as it could result in a much bigger tax refund.
Consider Your Filing Status Although 9 out of 10 couples file jointly, that might not be the best option. There are circumstances, such as when one spouse has a lot of medical expenses for example, when Married Filing Separately might produce a bigger refund. There is a long list of pros and cons to this tip, so this is one to best discuss in person.
Maximize Your Contributions You have until the filing deadline (April 15 as of today) to open or contribute to a traditional IRA for last year's taxes. The benefit of doing so, besides saving for retirement, is that it reduces your taxable income.
Don't Be Afraid to Claim a Friend or Relative If you've been supporting a friend, relative, or significant other, you might be able to claim them as a dependent. There are rules as to who qualifies, but it's possible if the non-relative lived with you the full year (relatives don’t need to live with you), doesn't provide more than 50% of their own support, and didn't earn more than $4,300 in taxable income.
Filing your taxes is never fun, but we at least make it easy. Give us a call and let's get the ball rolling.