Get More From Your Tax Return

income taxIt’s that time of year again. People are receiving their W-2’s in the mail and going through receipts to see what they can get a credit for or get deducted from their taxes. My husband is a business owner and tax time is stressful for him. He has hundreds of receipts to go through to look for anything that can be a deduction, he has to get all of his business paperwork in order, and it just always seems like a huge mess. Even though it is a lot of work, it is giving us the money back we need by finding out how we can get more out of our tax returns.

Boost By Rethinking Your Filing Status

Your filing status can greatly affect your refund size, especially if you are married. Most married couples file jointly, but it is not always the best way to boost your refund amount. You can file as married-filing-separately, which is going to take a lot more effort. This may seem like a lot of work, but by putting in your time will offer a decent tax savings. The IRS uses a percentage of adjusted gross income to determine which deductions can be used. This could be anything from medical expenses to certain miscellaneous expenses, such as a lunch with clients. If you file separately, it gives each spouse a lower adjusted gross income. If one spouse travels a lot for work may have travel expenses such as baggage fees that require separate filing. Expenses can also add up for a spouse who is unemployed but looking for work. This could include long distance calls, preparing their resume, career counseling and more. This could also be a miscellaneous deduction that reduces taxable income. Although filing separately may seem like a great idea, it has drawbacks such as losing out on credits that would be available to those filing jointly.

Find As Many Deductions As Possible

Yes, this seems like the obvious answer, but a lot of people aren’t aware of exactly what they can claim as a deduction. If you keep a trip log for things such as job-hunting, doctor’s appointments, and volunteer work, the miles will add up and represent deductions. Parking, toll and bus or taxi receipts can support your mileage claim. You can record the miles you drove and use that as a write off for the cost of using your ar through the standard mileage rate. If you keep adequate records of your travel expenses, this can help you reach the minimum percentage of adjusted gross income for deductions in the miscellaneous category.

Moving for a new job that is 50 miles or more away is another way your tax refund can be boosted. You can deduct moving, storage, travel expenses and anything else that is related to your relocation.

Charitable deductions help your refund cause as well. Keeping good records lets you add up the money spent doing charitable work. You can also claim the market value of any clothing or household things you donate and if you baked for a fundraiser, the cost of ingredients can be deducted.

Getting the most out of your tax return may seem like hard work and too much effort with too little time, but in the end, you will have more money in your pocket if you take that extra time. My husband spends weeks preparing to submit his tax return as a business owner. And once we get that check that is enough to pay bills, our kids school tuition, and buy anything else he need for the business, we realize that it is worth the weeks of preparation.

 

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