There are many different strategies for approaching your taxes, but most of the time the goal is to end up paying no more than you owe. When it comes to tax time, you might even be hoping to see a bigger refund check than the year before. To get the most out of your taxes, you’ll want to focus on reducing your taxable income as much as possible.
You can use these strategies to help you lower your taxable income and potentially increase your refund for next year. The best way to make sure you’re getting the most out of your taxes is to look for a reputable tax service in Des Moines, IA that can help you set up your taxes and accounts to maximize your refund.
Adjust Your Withholdings
The first thing you can do to maximize your tax refund is to look at your current tax withholding on your paycheck. When you started your job, you filled out form W-4, an IRS form that tells your employer how much federal tax should be withheld from your paycheck. Each allowance you claim on your W-4 means less tax is withheld from your paycheck. The more allowances you claim, the larger your paycheck will be, because you aren’t having as much taken out for taxes.
You can increase your tax refund simply by re-filling out this form with your employer. On the form, you can choose to withhold an extra amount of money from each paycheck. This will reduce the take-home amount of your paycheck, but it’s an easy way to help avoid owing taxes or increase your refund. If you don’t want to reduce your paycheck to overpay on taxes, you may want to use a different strategy for increasing your refund.
Look at Your Filing Status
Choosing a filing status can make a big difference in the amount of your tax refund. There are three common filing statuses: married filing jointly, married filing separately and single. If you are married, you may think that it makes the most sense to file as married filing jointly. Married filing separately, however, involves treating each spouse’s income as an individual, which lowers your adjusted gross income. Filing separately may allow you or your spouse to take advantage of tax breaks or deductions you were not eligible for when filing jointly.
Examine All Possible Deductions and Credits
The easiest way to potentially increase your refund without reducing your take-home pay is to take advantage of tax deductions and credits. A deduction reduces your total taxable income to bring you to a lower tax bracket. It doesn’t provide a dollar-for-dollar reduction on your taxes owed. On the other hand, a tax credit is a dollar-for-dollar reduction of the amount of taxes you owe.
To make sure you’re taking all of the deductions and tax credits available to you, look for reliable tax services in Des Moines, IA. Your tax service professional will help you choose the deductions and credits to potentially lower your taxes and increase your refund.
Get the most out of your taxes in the new year by contacting the tax experts at Accounting & Tax Professionals, PLC today!