Taxes can be complex, but one thing is for certain: the bigger the tax refund, the better. Review which tax tips are most helpful for a greater refund.
For a lot of people, taxes are convoluted and time-consuming. However, a hefty tax refund is quite the incentive to take a thorough approach to filing taxes. If your clients come to you looking for advice, here are five easy ways your client can increase their tax refund that make the upcoming tax season a little less painful for them.
Change the Withheld Money on Your Paycheck
Reducing the number of allowances one claims on their W-4 can result in a more favorable tax refund. Reduced allowances can cause a smaller paycheck because they minimize taxes, but a person is likely to make up for it with a larger refund.
Revisit Your Filing Choices
Five filing options are offered for tax returns:
- Married Filing Separately
- Married Filing Jointly
- Head of Household
- Qualified Widow or Widower with Dependent Child
It’s vital for people to confirm the correct one on their taxes. The right filing option can reduce tax obligations and boost refunds.
Open a Retirement Account
A traditional retirement account is a reliable way to help one maximize their tax refund while preparing for their future. Any contributions someone makes to a traditional retirement plan such as an IRA or 401(k) are tax-deferred until they withdraw the funds during retirement.
Consider an Itemized Deduction
Come tax season, people must decide whether they prefer a standard or itemized deduction on their taxes. Deductions, along with credits, reduce tax liability. One must subtract them from their income before configuring their taxes. To reach an itemized deduction amount that’s greater than the standard deduction, many folks opt for year-end charitable giving. If your client or employee wishes to make a sizable donation to hit their ideal itemized deduction amount, make sure to provide them with these tips for year-end charitable giving.
Hire a Professional Tax Preparer
Taxes can get complicated and stressful, and people can make many mistakes in the tax-filing process. However, one of the five easy ways your client can increase their tax refund—onethat requires an investment—is to use a tax preparer. Hiring a professional tax preparer ensures the optimal tax refund. Professional tax preparers are extremely knowledgeable on best practices that can identify necessary credits and deductions, minimize annual tax obligations, and secure an ideal tax refund.
Communicate these five simple tricks to your clients or employees to ensure they receive the best tax refund possible. With your help, individuals can acquire better tax practices and greater refunds.
Kate Romeo is a freelance writer in the Chicagoland area for multiple online publications that allow her to showcase her interest in all things business. She uses her skills in writing to create content that is thought provoking and informative.