It’s no surprise that every taxpayer wants to pay less tax and get a bigger refund. And even though you get
the biggest possible refund when you file with ezTaxReturn, it doesn’t hurt to familiarize yourself with some tax boosting strategies.
Reconsider your filing status
Your filing status can affect your refund amount, especially if you’re married. Although most married couples file a joint return, it may be more beneficial to file separately. For example, you can only deduct medical expenses if it’s more than 7.5% of your adjusted gross income (AGI). By filing separate, it will be easier to hit your mark because each spouse’s AGI will be lower. Try calculating your return using both scenarios to see which one gives you a better refund. When you file with ezTaxReturn, we’ll do the calculations for you to make the decision easy. The downside is, if you choose to file separately, you may miss out on some of the credits available to those filing joint.
Don’t miss out on deductions
Make sure you keep good records of all your expenses throughout the year. Writing down every single expense may be tedious, but your records may translate into deductions which lowers your taxable income. For example, educators who paid out of pocket for classroom supplies may be able to deduct up to $250 of unreimbursed expenses. Qualified expenses include books, supplies, computers including software and other equipment.
Timing is everything
Rather than wait until the New Year to schedule medical appointments, try squeezing them in before the year is up. Doing so will increase your deductible medical expenses. If you can, also try to make January’s mortgage payment before December 31st so you can get the additional interest for your mortgage interest deduction.
Claim available credits
The best way to increase your refund is to take advantage of available credits. Credits reduce the amount of taxes you owe and some can even produce a refund. One of the most popular credits is the Earned Income Credit (EIC) which is potentially worth up to $6,660 for workers with low to moderate incomes.
Maximize your IRA contributions
You have until April 15, 2021 to make contributions to your IRA for 2020. The maximum you can contribute is $6,000. If you’re over 50, you can take advantage of the catch up provision which means you’re allowed to contribute an extra $1,000 towards your IRA. The contributions you make to a traditional IRA lowers your taxable income. If you contributed to a Roth IRA, you may be able to claim the retirement savers credit which also lowers your taxable income.