Paying your taxes is one of the only guaranteed things in life. You have until around the middle of April to file every year. The Internal Revenue Service (IRS) offers extensions for those who need more time to file and also has payment plans for those who owe money. Many people file in late January or early February because they want to get their tax refunds back faster. As long as you paid more than you owe, you will get a refund. There are some easy tips that help you maximize your refund and get more money back from your taxes though, no matter how much you paid.
Use the Home Office Deduction
As long as you do any work from home and have a dedicated office, you can take the home office deduction. It often applies to self-employed individuals and gig workers such as Uber drivers. The IRS requires that you use your office solely for work and nothing else. You cannot take the deduction if you have a home office in your bedroom or kitchen. It lets you deduct a portion of your home’s bills and other expenses based on the size of your office.
Claim All Credits
The IRS offers different credits you can claim on your taxes to get your money back. If you get a $2,000 refund and qualify for a $500 credit, you get a total of $2,500 back. You can take the Earned Income Credit if you have at least three children living with you. The Child Tax Credit is another option for parents that gives them a credit based on how much they earn and how many children they have. Most credits are available for both married couples and single people with kids.
Spend Money on Health Costs
Many insurance plans include either a flexible spending account (FSA) or a health savings account (HSA). Both of these accounts give you money you can use to pay for costs that your insurance doesn’t cover. You can take money out to cover the copay when you visit your doctor or when you need equipment to treat a chronic health condition. The IRS allows you to move money into your FSA before taxes to build up the available funds. When you file your taxes, you only need to pay the total amount you earned minus those contributions. You also get more money to spend on your health needs.
Donate Money
Every time you donate money or goods, you earn deductions on your taxes. The end of the year is the perfect time to go through your home and donate all of the old clothing you no longer wear and toys your kids don’t like. Not only do you free up space for holiday gifts, but you get a record of your donation. Apply the donations to your taxes to get more money back. Charitable donations also include the money you give to organizations in your community as well as national groups.
Talk to a Professional
The best way to get more money back on your taxes is with a tax professional. They can help you find deductions you never knew you could claim and navigate through the tricky world of cryptocurrency. Thanks to crypto tax breaks, you can get more back when you made money in the crypto market. You may also need help with the new 1099 rules. If you made $600 or more from any source, you will get a form that requires you to pay taxes on the money. A tax professional can help you look for deductions that offset those costs such as the money you spent on fuel and depreciation of your vehicle as well as the cost of your goods.
Get More with Tax Breaks
Tax breaks give you an easy way to reduce the amount of taxable income you made in the last year and get more money back when you file. These breaks are available for parents and people who work from home. You also qualify for deductions when you run a small business or sell online. Working with a tax professional and donating money or goods are just some of the ways you can cut back on the amount you owe and get even more money back.
