April 5, 2017
You may already know that the more allowances you claim on your W-2, less income tax will be held back. This means you will receive larger paychecks, but a smaller tax refund. To maximize your tax refund for 2017, take a look at these tips and see if you can incorporate them the next time you file.
Choose the correct filing status
Don't assume that just because you are not married that you should file as "single”. If you are a single parent or support a dependent, you may qualify as "head of household,” which offers more favorable tax rates and higher standard deduction. If you are married, run the numbers to see whether you are better off filing jointly or separately.
Deduct childcare expenses
If your child goes to daycare while you go to work, you can deduct the costs from your taxable income.
If you pay out-of-pocket for job related expenses such as your cell phone, laptop, mileage, etc, you can deduct the costs from your taxable income.
Make charitable donations
Clean your closet and cabinets and give away your clothes and household items, donate an old car, or make a financial contribution to your church or favorite charity. — all these things may be tax-deductible. Keep your receipts and take note of what you donate so you can itemize them come tax time.
Contribute to your retirement account
Contributing to a 401K or IRA will provide you with great tax benefits. Your contributions are made with pre-tax dollars, which helps lower your taxable income.
Pay for medical expenses with a flexible spending account
Many employers offer FSAs and they can be a valuable tool for lowering your tax bill by using pre-taxed dollars.
Deduct medical costs
Get a tax deduction for all the medical expenses that exceed 10% of your adjusted gross income (7.5% if you are over 65 years).
Take the Earned Income Tax Credit (EITC)
If your income is relatively low, the EITC can shrink your tax bill and boost your refund. The EITC is underused, be sure to see if you can take advantage of it.
Hire a professional
While it may be less expensive to go online and file your taxes on your own, a professional will know the latest laws and strategies and may very well get you a higher refund.
These tax tips, along with many others, will help you maximize your 2017 tax refund and allow you to spend as you wish! If you have questions or find filing your taxes to be stressful and overwhelming, contact the experts at Tax and Business Consultants in Blair, Nebraska for assistance. We have been providing professional and trustworthy financial services to our new and long-standing clients for more than 50 years and we would love to help you too!
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