Ah, Spring! Along with the bird chirps and rays of sunshine comes the anguish of filing your taxes. Episodes of Seinfeld and
comic book strips tell us we should fear Tax Season. But we say rejoice! A tax refund could be enough to send you on your way to a dream vacation.
Here are some ways you may be able to increase your refund.
Write it Off
If you’ve given money to charity, donated goods or moved for work, you may be in a prime position to reduce your taxable income by making a
deduction, which in turn decreases the taxes you owe to the federal government. There are
numerous deductions available—volunteer hours, doctor’s appointments and toll fees, for example—that can have a significant impact on the amount of money you receive from your tax return. Delta Community Credit Union recommends speaking with a tax professional or using respected resources such as
TurboTax to ensure you are claiming the tax deductions for which you're eligible.
Plan for Your Retirement
Planning for retirement early not only pays dividends later on, but also helps increase your tax refund now. Setting up and contributing to an
Individual Retirement Account (IRA) lowers your taxable income. There is an IRA contribution deadline of
April 15, so be sure to keep that in mind and know your personal limit based on your budget. Consult a financial advisor or tax professional if you have any questions and check with your Human Resources manager at work about how to put more of your paycheck aside towards your IRA.
Credit, Please
Credits are actually more effective than deductions in ensuring you will have your largest tax refund yet. While deductions reduce your taxable income,
credits are taken out of the income tax that you owe. Available credits include: Earned Income Tax Credit,
Child and Dependent Care Credit,
Child Tax Credit, Education Tax Credit. If you think you may be eligible for these credits, consultant a tax professional to confirm.
Benefits for Job Hunters
If you looked for a new job in the past year, in the same industry as your current position, you can deduct job search-related costs from your taxes as a miscellaneous expense. If you landed the new job and are moving to a new area because of it, you can deduct the cost of moving yourself and your household goods to the new area. If you didn’t land the job, that’s too bad. But you can STILL write off the expenses accrued from transportation, food and lodging, employment agency fees and even the cost of printing your resume! Job searches are long and tedious, so make sure you take into account all the money you spent while looking. And if you anticipate starting a job search anytime soon, remember to keep detailed notes for next year’s Tax Season. It’s never too early to be prepared!
Article submitted by Autumn
