As tax season approaches, everyone seeks ways to maximize tax refund. Unearth the hidden strategies that go beyond the obvious, ensuring you pay no more than you owe and possibly increase your refund. In this guide, we’ll delve into five tried-and-true methods to boost your tax refund for the year 2023.
Maximize Tax Refund: 5 Tips to Boost Your Refund (Photo from: CBS 58)
Rethink Your Filing Status
Maximize Tax Refund Tip 1:
Choosing the correct filing status is crucial. While most couples opt for joint filing, married filing separately can be a game-changer under specific conditions. TurboTax experts reveal that this status may lead to tax savings, especially if one spouse has substantial deductible medical expenses or if it makes you eligible for a more prominent Child Tax Credit.
Maximize Tax Refund Tip 2:
Unmarried taxpayers with dependents can benefit from filing as Head of Household, offering a higher standard deduction and more favorable tax brackets than filing as Single. Surprisingly, many caregivers of elderly parents can qualify for this status, provided they contribute more than half of their parent’s financial support.
Maximize Tax Refund Tip 3:
Unlocking often-overlooked deductions can significantly impact your tax refund. From state sales tax and reinvested dividends to out-of-pocket charitable contributions and student loan interest, these deductions can add up. TurboTax emphasizes the importance of meticulous records for these deductions, ensuring you take advantage of potential savings.
Embrace Tax Deductions
Maximize Tax Refund Tip 4:
Contributing to traditional IRAs and HSAs can further reduce taxable income. TurboTax advises leveraging the flexibility of contributing to a traditional IRA until the filing deadline, potentially using your refund to open the account. Additionally, pre-tax contributions to an HSA can be made until the filing deadline, provided specific requirements are met.
Maximize Tax Refund Tip 5:
Timing is crucial. Strategic planning, such as making certain payments or contributions before the end of the year, can lower taxable income and increase your refund. From mortgage payments and health-related expenses to charitable donations and home office deductions, understanding the calendar can be a refund-boosting strategy.
Maximizing your tax refund involves a combination of intelligent filing choices, strategic deductions, timely contributions, and awareness of valuable tax credits. By implementing these hidden strategies, you can confidently navigate the tax season and potentially see a boost in your refund for 2023.
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