How Can I Get the Most Back Through My Tax Refund this 2017 Tax Season?
Tax season should be awesome! All year long you’re stuck with paying taxes to the government, but now is the time to get your money back!
This 2017 tax season, and wouldn’t it be great to get the biggest tax return in your mail and enjoy your tax refunds on something special? We have some great tips for you, whoever you may be, on what you should be claiming during your tax preparation to get the most money back.
Take Advantage of What You Do
In order to take advantage of all the tax deductions you qualify for, you need to first look at what you have done all year long. If you’re looking for money, let’s start by looking back at what you have done this year.
You Became Your Own Boss
The biggest and most daring task to take on is to make your own money. If you are a business owner, or a freelancer by any means, you should know the pains and struggles of paying high tax rates every month, and getting little to none in return. Lucky for you tax season is your personal bonus check! Starting up a business can be expensive – buying new office equipment, purchasing a wide inventory, choosing decor that gives your business personality – but if you’re smart you can write it all off as proper tax deductions.
Do you participate in Uber or Lyft as a driver? You can buy a new car for that, and write it off as a business expense! However, the one thing about claiming deductions for business is to make sure that none of it intermingles with your personal expenditures. You don’t want the IRS to put a huge audit flag on your folder because you’re claiming personal expenses for business.
Other big items that you may qualify for and write off on your tax return includes –
- Accounting and legal fees
- Motor vehicle expenses
- Traveling and Mileage
- Office Rentals
- Hiring Employees
You’re a College Student
It may seem like you’re spending way too much money for a proper degree at a college or university, but it all pays off in the end. Current students can get a lot of tax deductions, even if they are not a full-time student.
For those that are interested in getting a head start on paying for their tuition, you will be awarded. Students who pay their tuition early in the year can write it off during their tax preparation. Even if it is just for one class, you can get back up to $2000. However, if you’re a student seeking a higher degree, and are making over $80000 per year, you are not eligible for this tax return.
Besides paying off your tuition early, we advise paying off your student loans as much as possible. Doing something small, like paying a couple future loan payments will reduce the interest on your remaining balance, giving you a tax deduction of up to $2500.
Between the two deductions above, you are only allowed to claim one or the other. The IRS won’t allow you to have both of these tax breaks the same year.
You Lend a Hand Out to Others
Perhaps 2016 wasn’t a very nice year to a friend, but you are a very nice person and care a lot about them. Sometimes they’ll crash on your couch, steal your chips and use your Netflix account. You’re a great friend, and will be awarded. That kindness can rollover into a big tax return. If you have a friend that has stayed the entire year and earned less than $4000, you are allowed to claim them during your tax preparation and see a much bigger tax return waiting on your kitchen counter.
What if your friends weren’t having problems, but you invested time through charity functions and volunteering? You are eligible for a tax break. In fact, you can deduct off your income taxes anything you purchased for a charity event, and can even deduct the mileage driving to and from an event, up to 14 cents a mile. Charity is supposed to be for nonprofit, but it looks like you’re getting some money back.
Other Means of Getting Tax Deductions
The items listed above are awesome means of getting money back, but they aren’t always reliable. You know you can’t stay in school forever, and eventually your friend is going to have to get their butt out of your house. So what else can you do to get the most back on your tax return? The answers are simple, so take a look at them.
Refinance Your Mortgage
With the housing market plateauing and daring to fall in the next couple of years, the time to refinance your mortgage is now. Most of your monthly payments happen to go towards paying interest during your first years of a mortgage, meaning it’s possible to deduct that interest. Don’t refinance your mortgage though just for the tax break, you should do it so you save yourself money over the long run. A good rule of thumb to follow is to only refinance if you can get a rate that is at least 1% lower than what you are paying currently, or unless you are switching your loan type.
Saving for Retirement
Many of us have 401(k) or IRA retirement accounts that we contribute little by little each month. Whatever we contribute to these accounts, we are allowed to deduct from our taxable income, making our tax bills smaller and our tax returns bigger. It’s a win-win because you will not have to pay taxes on that money contributed to your retirement, and when you pull out of it when you do retire it will be tax-free. One of the main drawbacks of putting money into retirement is that it’s inaccessible and they’re penalties if you withdraw too early. Putting away money now could mean the difference of going on that summer vacation you had in mind this year or not.
Make Use of the Earned Income Tax Credit (EITC)
If you made very little this year, the EITC program can minimize your tax bill and help increase your tax refund immensely. In 2016, the maximum credit you got on your taxes was $6269, with the average being around $2400. The EITC is a great tool for those who qualify, but is rarely used or taken into consideration. Check here to see if you can take advantage of it.
Hiring a Tax Professional
It may seem beneficial to file your taxes yourself, but there’s so many problems that can happen, some that may easily be avoided if you hire a tax professional. It’s better to anyways, as tax professionals know the latest tax-law changes and know a lot more about the tax code than you. They are professionals after all.
Don’t just hire anyone though, get help from Lucia CPA! Here at Lucia CPA, we excel at helping clients take care of their tax preparation and get them filed on time.. Whether you need help with getting your taxes prepared, or have a question with tax code, we can help you get the biggest tax return you deserve. Give us a call today at 1-800-381-4132 and see how we can help you! We are not your ordinary bean counters.
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