At the end of the year one thing is for certain.EVERYONE wants a HUGE tax refund, and after Thanksgiving and Christmas I know we could all use it! Making sure that you are getting the biggest tax return is important and has to be done right from the beginning until the end of the filing process, so I have included in this article some really great ways to make sure that you get the best tax return possible.
1. Children
Kids are a great way to lower your taxes. They are considered dependents and so you get money just for having them around, plus things like sports and daycare are tax-deductible.
2. Donations
Donations of more than $20 are tax-deductible! If you donate to a cause, you should get an income tax form around tax time from the charity that tells the tax agency you donated. Not only can you feel good giving to the needy, but you can write those donations off on your tax return as well, so go ahead and give!
3. Keep Your Receipts
This is particularly important if you are self employed: Be sure you keep all of your receipts! When doing your taxes you would be very surprised at what is deductible, so keep all of your receipts. You can write off a portion of your utility bills and even your phone bills and lower your taxes considerably. If you work outside the home or you’re a student, you can still find deductions. A great example that most people don’t take advantage of is that students and employees can write off bus passes and students can sometimes write off text books! KEEP YOUR RECEIPTS!
4. IRAs
Individual retirement arrangements were introduced in 1974 with the enactment of the Employee Retirement Income Security Act (ERISA). Taxpayers could contribute up to $1,500 a year and reduce their taxable income by the amount of their contributions. Initially, ERISA restricted IRAs to workers who were not covered by a qualified employment-based retirement plan. In 1981, the Economic Recovery Tax Act (ERTA) allowed all taxpayers under the age of 70? to contribute to an IRA, regardless of their coverage under a qualified plan. It also raised the maximum annual contribution to $2,000 and allowed participants to contribute $250 on behalf of a nonworking spouse. The Tax Reform Act of 1986 phased out the deduction for IRA contributions among higher-earning workers who are covered by an employment-based retirement plan. However, those earning above the amount that allowed deductible contributions could still make nondeductible contributions to their IRA. The maximum amount allowed as an IRA contribution was $1500 from 1975 to 1981, $2000 from 1982 to 2001, $3000 from 2002 to 2004, $4000 from 2004 to 2007, and $5000 from 2008 to 2010. Beginning in 2002, those over 50 could make an additional contribution called a “Catch-up Contribution.
If you self employed, it’s a good idea to start kicking into an IRA as well. Even if you can only put in a few dollars a month, it is all tax-deductible and it’s a good idea to keep your eye to the future.
Of course there are many other ways to claim tax deductions and get a bigger tax return, but these are some of the simplest ways to go about it. Talk to a tax specialist in your area or give us a call at (888)-570-5562.
Wondering how much you might get back? Try our FREE online tax calculator http://www.cpasitesolutions.com/content/calcs/Tax1040.html
Have more questions? We will be glad to answer any questions that you may have. To find out how to get the best tax refund, visit us at: http://www.thomasspruilltaxes.com/