Getting a big tax refund can feel like Christmas in the spring. If you’re hoping to increase the odds of a bigger tax refund this year or the next go-around, there are things you can do to stack the deck. Here are a few helpful hints to help you get a bigger tax refund when tax time comes rolling around again.
Invest in Tax Planning
Tax planning is one of the most effective ways to take advantage of every deduction you’re entitled to in order to get the maximum possible refund. Tax planning generally begins at the start of the new year and your projected income is used to determine the best tax strategy.
Increase Your IRA Contributions
One of the best ways to make sure your tax refund is as large as it can be is to increase your IRA contributions to your retirement fund. This facilitates savings for retirement and lowers your overall tax burden ensuring that you’ll bring home more of your money when it’s time for those refunds to roll in.
Refinance Your Home
When you start paying a mortgage, most of the money you’re paying out goes to interest. While the principal amount of your mortgage isn’t tax deductible, your interest is. Refinancing your home can be a wonderful way to make sure you’re getting the most money back when it comes to that refund.
Don’t Overlook Dependent Care Deductions
Taking care of children and aging parents can cost a great deal. However, you can deduct many of these expenses and lower your overall tax burden significantly. Alimony is also deductible, as well as certain healthcare expenses.
Deduct All Donations and Tithes
Your tithes and donations are tax deductible. Property and cash donations are deductible, as well as the mileage you use to assist a charitable organization. Be sure to keep receipts throughout the year in order to be able to claim them.
Getting a big refund isn’t something you have to leave to chance. These hints will help you ensure that your next refund has the best possible chance to turn into a small windfall. Follow these tips and by tax time next year, you’ll be laughing all the way to the bank.