Now that your tax return has been filed, you’re likely ready to put taxes out of your mind until next year. But wait! If you want to maximize your tax refund next year, here are some things you can do now:
- Reduce your withholding allowances. If you’ve owed money in the past, it is time to review the allowances you claim at work. Reducing your allowances will increase your income tax withholding, so your paycheck will be less, but the payoff will come next spring when you’ll get a tax refund instead of owing tax. Ask your Human Resources Department for your W-4 form to get started. You can also use TurboTax W-4 withholding calculator to help you figure out your withholding.
- Keep track of deductions. Wouldn’t it be nice if you could open a file and everything you need to prepare your tax return is there? Here’s a simple way to make that happen. Prepare a file and label it “Current Tax Info”, and tuck it into your desk drawer. Now, every time you see something during the year that’s tax deductible, drop it into the file. Don’t forget union dues and unreimbursed employee business expenses like mileage, equipment, education, and supplies. If you’re self-employed you can track your income, expenses, mileage, and capture your receipts year-round with QuickBooks Self-Employed.
- Look for a better job. If your goal is to find a better paying job this year, Uncle Sam is on your side. You may be able to deduct the cost of job-hunting travel, meals, telephone calls, resume preparation, career counseling, and employment agencies, if they exceed two percent of your income, regardless of whether you actually change jobs.
- Learn something new. Maybe you want to learn a new career, update your skills in your existing career, or study a subject you are interested in just for the heck of it! No matter your motivation, if your income is moderate, you are eligible for the Lifetime Learning Credit as well as college credits. You can claim a tax credit of 20% of your tuition expenses, up to $2,000 in tax credits. You don’t need to be on track for a degree – the cost of any class that you take at the college level is eligible for the tax credit. Don’t worry about knowing these tax laws. TurboTax will ask you simple questions and figure out the education tax credit or deduction you are eligible for.
- Clean out your closets and donate to charity. In addition to creating new space in your life, you can take a quick tax deduction for the fair value(or thrift shop value) of household goods that you no longer use or books and magazines you give to the library. TurboTax ItsDeductible can help you accurately value and track your charitable donations.
Following these easy tips will help you get more money and boost your next tax refund!