Maximize Your Tax Refund in 6 Steps
It’s now 2009, so another tax season is upon us. This doesn’t have to be a sad time of the year. Follow these easy steps to maximize your refund!
File early
We’ll start off with an easy tip that isn’t really about the size of your refund. It’s all about speed.
File your tax return as early as you possibly can. The quicker you file, the sooner your tax refund will be in your hands. It makes sense, right?
How many people do you know who file their tax return in January? Not many. If you do it early, there is a tiny processing queue, so your refund will be sent out quickly. But if you wait until April 15, 2009 at midnight, your tax return will be in the endless pile with most of America. File early for a speedy refund.
Deduct everything
Tax deductions are yours to take. So take them!
There is nothing wrong or un-American with claiming every deduction available to you. Don’t lie or falsify information on your return. But maximize your income tax refund by leaving no legal deduction on the table.
Track contributions
One easy thing you can do during the year in preparation for a big tax refund is to track your charitable contributions.
This is one thing that people neglect to properly track and document. Do you keep a list of every check you put in the collection plate at church? What about those household items you donate to Goodwill periodically?
You can’t claim deductions that you aren’t aware of, so proper tracking is essential. If you don’t know how much you’ve donated to charities, you can’t get the tax refund that you have coming to you. I’m a fan of tracking deductions with It’s Deductible.
Double check everything
Getting audited is not the way to get a big tax refund check. You don’t want to make mistakes on your tax return forms. And you certainly don’t want to claim improper credits or deductions.
The best thing to do is to prepare all your forms and then double check them. Make sure it’s all correct.
Use software
When I had simple taxes, I printed the IRS forms and filled them out by hand. But this certainly isn’t the best way to get a big tax refund. When you have possible deductions, credits, and other calculations, you need something more than a pencil and a calculator.
For my tax preparation needs, I love Turbo Tax
Hire an expert
Let’s face it: sometimes we need to bring in the big guns. I never do my own auto repair; I hire a mechanic. If you’re not confident that you can properly prepare your taxes, hire an expert to do it for you.
Tax preparers and accountants do this work a lot. They know the common mistakes that individuals make, and they know ways to find extra deductions or credits that we might miss on our own. I’ll bet a good tax preparer can easily obtain a larger tax refund for you, so the extra money can pay his fee.
Any more ideas?
Do you have any tax refund tips to share with us? Add them below in the comments.
Photo by noahwesley
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About Andrew Flusche
Lawyer, bicyclist, husband.
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January 2nd, 2009
Do better tax planning so that you don’t get a refund, which is basically an interest-free loan to the government, and maximize the taxes you must pay to the extent possible without incurring a penalty. The latter results in an interest free loan from the government to YOU. This approach requires a lot of discipline, but will reap a significant return.
January 3rd, 2009
@Malena – You are absolutely right! We definitely should plan for taxes year round. And I’m a big advocate of not withholding more than you have to. I like tax refunds, but I’d rather just keep my money in the first place.
February 1st, 2009
Is it possible that the expert you hire may manage to scam some money?
February 2nd, 2009
@Rajbir – Anything’s possible. That is why I suggest only hiring someone (or a company) that you trust. And be sure you know up front how much you have to pay the preparer.
September 17th, 2009
@Andrew-You are right. It is always beneficial to consult a proven consultant/company for tax matters. Again, very important to know upfront the costs for the same as well as what all should one expect for the cost.