Less than Two Weeks Left to Take Advantage of Tax Strategies for a Bigger Refund
The tax season is upon us and for many, it can be a daunting time of year. However, with less than two weeks left to file your taxes, there are still some smart strategies you can use to get the most out of your return. By taking advantage of these tax strategies, you can ensure a bigger refund and ultimately, more money back in your pocket.
Here are some tips to help you get the most out of your tax return before the deadline hits.
1. Contribute to Retirement Accounts
One of the best ways to reduce your taxable income is by contributing to a retirement account such as a 401(k) or IRA. By doing this, you not only save for your future but also lower your taxable income. The deadline for contributing to these accounts for the 2020 tax year is April 15th, so there is still time to make a last-minute contribution and potentially increase your refund.
2. Take Advantage of Deductions and Credits
Deductions and credits are your best friends when it comes to lowering your tax bill. Deductions reduce your taxable income while credits directly reduce the amount of tax you owe. Some common deductions include charitable donations, mortgage interest, and property taxes. For credits, be sure to check if you are eligible for the Earned Income Tax Credit, Child Tax Credit, or American Opportunity Credit. These can significantly reduce your tax bill and increase your refund.
3. Consider Itemizing Your Deductions
While taking the standard deduction may seem like the easier and quicker option, it may not always be the most beneficial. If you have a significant amount of deductible expenses, such as medical expenses, state and local taxes, or mortgage interest, it may be worth itemizing your deductions. This can result in a larger deduction, ultimately increasing your refund.
4. Use a Tax-Preparation Software
If you are not a tax expert, using a tax-preparation software can be extremely helpful. These programs walk you through the filing process and ensure that you don’t miss any deductions or credits. They also do all the calculations for you, making the process quicker and more accurate.
5. Don’t Forget About State Taxes
While federal taxes may be the focus, don’t forget about state taxes. Many states have different tax laws and deadlines, so be sure to check if there are any last-minute strategies you can use to reduce your state tax bill. For example, some states allow you to deduct contributions to a 529 college savings plan.
6. File On Time
It may seem obvious, but it’s essential to file your taxes on time. Not only will this avoid any penalties, but it also ensures that you get your refund sooner. If you need more time to file, you can request an extension, but keep in mind that this only gives you additional time to file, not to pay any taxes owed.
7. Seek Professional Help
If you have a more complex tax situation, it may be worth seeking professional help from a tax advisor or accountant. They can provide personalized advice and help you maximize your refund. While there may be a cost associated with their services, it could end up saving you more money in the long run.
In conclusion, there are still some last-minute tax strategies you can use to maximize your return before the filing deadline. By contributing to retirement accounts, taking advantage of deductions and credits, considering itemizing, and seeking professional help if needed, you can ensure a larger refund and keep more money in your pocket. Don’t wait until the last minute – take action now and make the most out of your tax return.
