Hoping to pay minimal taxes is no crime. Afterall, why should you pay more taxes than you owe to Uncle Sam? If due to some reasons you have overpaid your taxes, tax refunds will help you get the amount back. There are several ways by which you can boost your tax refunds. And at AOTax, we ensure that you have access to some of the best ways to achieve the same.
Smarter Tax Deductions
Not many tax payers are aware of the fact that the miles that you put on your car for charitable donations or even medical purposes, you can claim them as deductions. While the miles that you drive for medical purposes is subject to the AGI threshold, it is calculated at 18 cents per mile. Similarly, miles accumulated for charitable donations is calculated at 14 cents per mile. If you drive about 50-60 miles a week for charity, that accumulates to $450-500 additional deductions.
Of course, it is a good habit to keep track and record of such transactions. Simple details such as the date, purpose, donations made, or market value of any goods that you have donated, would help you while filing taxes.
IRA and HSA contributions
While a lot of taxpayers are aware of IRA or even HSA contributions, there are a few tricks that you can try. For example, did you know that you can contribute for traditional IRA for the previous year during the current financial year? This means, you can make contributions towards your IRA for 2019, till 15th April 2020. This allows you to claim for deductions for the tax filing of 2019.
If you aren’t already aware, the IRA will reduce your taxable income and thereby the taxes that you owe to the government. If you are 50 years or older, you can make use of catch-up provision to contribute towards IRA. And even though they both quality for deductions, if you qualify you can receive Saver’s credit as well.
Tax Filing Status
Choosing a filing status is one of the first steps to filing your tax returns. And it can affect your tax refund significantly. This is even more significant if you are married. Statistics show that 96% of married couples file their taxes together. Though that is the norm, it isn’t always the most beneficial route selected. Opting for married and filing separately as a status does require some additional effort on your part. However, you can save a considerable amount of money in the form of taxes or even refunds.
For starters, when you opt to file taxes separately, each spouse gets a lower AGI or Adjusted Gross Income. When you file your taxes separately, the Child Tax credit is available for both spouses to avail. Separately calculating taxes will result in higher refunds when it comes to education. At AOTax, we can help you with different calculations and help you get a higher refund as well.
Taxpayers who are not married, can use the filing status as head of the family rather than unmarried. This will allow taxpayers to avail a higher standard deduction as compared to filing as unmarried individuals. Having a dependent parent or child will allow you to benefit from better deductions.
Timing your tax returns properly will also enhance your chances of getting better tax refunds. The easier way to handle such situation is to take help of the expert services at AO Tax. With various services on offer, you can always find help that you are looking for and be stress free about your tax returns.