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Thursday, January 23, 2014

5 ways to get a better tax refund this year

 Home damage due to disaster is tax deductible
Energy saving improvement deductions expired this year
Tax season can be a hassle. When trying to collect all your receipts and relevant forms and remember all the tax codes it is easy to get overwhelmed. However, with a little attention to detail you might be able to increase the one good part about taxes, the return.

Filing status

Adjusting your filing status if you’ve had a major life change can be beneficial. There are five different filing statuses, each with their own implications. They are Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er) with a Dependent Child. If you are unsure as to which category you fall under for the next tax year, the IRShas made a handy quiz available to help you determine how to file.

Going green

In an apparent effort to encourage green living Uncle Sam rewards any home improvements that make your home more energy efficient – but not for long. This is the last year you can claim up to 30 percent of the total cost of any energy saving improvements you’ve made this year with a $1,500 limit. This and several other deductions expired January 1st.

Don’t forget about deductions

Whether you are on top of your taxes as early as January or you put it off all the way to April, the process of gathering receipts and forms and staying informed of each tax code is complicated. The most effective way to increase your tax refund is to pay attention to all of the deductions you are eligible for. However, with the overwhelming nature of tax season, it is easy to miss a few. In fact, there are several that are commonly forgotten:

  • Job hunting costs: A time when you are in between jobs is definitely a stressful one. However, if looking for a job meant having some expenses to deal with then you can get them deducted. Anything from travel to printing business cards can be taken into account and reflected in your refund this year. Unfortunately, this doesn’t apply for expenses accumulated when looking for your first job but you can deduct the cost of moving if your first job meant changing your home.
  • Charitable donations: Everyone knows that you can deduct big charitable donations but the little-out-of-pocket donations can add up as well. Public radio, churches, awareness charities, mileage, any donation you make to a non-profit organization can be deducted even personal ones. If you give over $250 you will need the organization to acknowledge it.
  • Disaster area: If your home is damaged in a declared disaster area then you can get a tax break on the damage.
  • Mortgage refinancing: You are able to deduct a refinanced mortgage based on the length of the loan.
  • Investments: If your itemized investment or tax planning expenses are more the 2% of your adjusted gross income you can get it deducted.

Increase what you’re withholding

If you really want to increase your refund you can always increase your withheld income. This is the money that you set aside for taxes when you fill out a W-4 form when you begin at a company. If you want to increase or decrease this amount, ask your boss or your company’s human resource department for a new W-4. Then you can increase your withholding and have your paycheck become a bit smaller but your refund will be bigger.

Remember job expenses

If your job asks you to pay for something out of pocket like supplies or equipment then you can deduct it. As long as you are not reimbursed for the expenses you probably qualify. This also works for things like union membership fees or the cost of being involved with other professional organizations. Unfortunately, there are some fees like travel that don’t apply.

If you are heading towards April 15th a little unsure about how you should handle your taxes this year, you always have the option of consulting a professional. Getting IRS tax help from levytaxhelp.com and similar resources allows you to resolve any issues you may be facing regarding your taxes. However, with these handy enhancers you can ease the burden of taxes with bigger refund.

Image license: Alan Cleaver, CC BY 2.0