Tax season 2023: Tips for getting a bigger tax refund from the IRS?

HAlthough Americans may disagree about how they operate taxes Being used by the government, many of us want to pay as little as possible during tax season or even maximize our refunds. These tactics go beyond the obvious to provide you Tried and true methods To reduce your tax liability.

Analyze the status of your files again

choice a file status One of the first choices you should make when filing your taxes, and if you’re married, this may have an impact on the size of your refund. While over 96% of married couples file a joint return each year, it’s not always the best option.

One disadvantage of doing so is losing some of the discounts and credits available to joint depositors when filing separate returns. To improve your chance of receive a refundWell, think carefully about your options. In addition, spouses must itemize their deductions or take the standard deduction. There is no mixing and matching between the two answers.

If they meet the requirements, single taxpayers who claim an eligible dependent can reduce their tax liability by registering as Head of the family.

Many taxpayers who provide care for elderly parents don’t realize they qualify to claim head of household status. Even if your parent does not reside with you, you can likely apply as head of household if you are responsible for more than half of their financial support.

Embrace tax cuts

There are many deductions you may not be aware of, and they are often overlooked. Your tax refund can change dramatically depending on what deductions you qualify for.

State sales tax: You can find out how much state and local sales taxes you can write off using the IRS calculator.

Reinvested Profits: Although not a deduction strictly speaking, this deduction can nonetheless reduce your overall tax burden. Include this in your cost basis when you automatically reinvest mutual fund earnings. By doing this, you may be able to reduce your taxable capital gains when you sell your shares.

Charitable contributions out of pocket: Not all large contributions qualify for write-off. Keep a record of minor expenses accepted as well, such as ingredients for a delicious cake you donated to the bake sale. How quickly you can add up to a few small donations to charity here and there might surprise you.

Student loan interest: You can deduct these expenses even if you don’t pay them yourself as long as you are responsible for them. According to recent regulations, if someone else pays the loan, the IRS will see it as if you received the money and use it to settle the student loan. You will be eligible for the deduction if you comply with all requirements.

Child and dependent care: For 2022, the Child and Dependent Care Credit will allow you to deduct up to $6,000 in eligible costs.

Maximize your IRA and HSA contributions

For the previous tax year, you have until the filing deadline to open or contribute to a Traditional IRA (unless the deadline is pushed back due to a weekend or holiday). This gives you the option to open the account with the refund after submitting the return early and claiming the credit.

Remember, timing can enhance your tax refund

Following the calendar increases the likelihood that taxpayers will receive a larger return. Look for donations or payments you might make before the end of the year that will lower your taxable income.

Become a tax credit expert

Because tax credits represent a dollar-for-dollar reduction in your taxes, they usually work better as refund boosters than deductions. You can deduct $100 on your taxes if you receive a $100 credit. Many Americans fail to claim tax credits, which costs them money.

You may be able to claim beneficial education credits if you are a college student or helping to support a child in college.

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