Are you looking to make the most out of your tax return this year? It's crucial to maximize every opportunity to save money and streamline your finances. Here are a few simple yet effective ways to ensure you're getting the most out of your tax return.*
Contribute to an IRA (Individual Retirement Account):
This smart money move requires only one step: contributing to an IRA. Not only does this help you save for retirement, but it also offers potential tax benefits. Depending on the type of IRA you choose, your contributions may be tax-deductible, reducing your taxable income and potentially increasing your refund. Check out our Retirement Accounts HERE.
Take Advantage of Tax Credits:
Do you know all the tax credits you qualify for? Types of credits include Earned Income Tax Credit (EITC), Child Tax Credit, or Education Credits. These credits have the potential to significantly reduce the amount of tax you owe or increase your refund, so it's worth exploring if you're eligible.
Itemize Your Deductions:
While taking the standard deduction is convenient, it may not always be the most beneficial option. If you have significant deductible expenses such as mortgage interest, medical expenses, or charitable contributions, consider itemizing your deductions to potentially lower your taxable income and increase your refund.
Other Retirement Contributions:
Besides contributing to an IRA, you could take advantage of employer-sponsored retirement plans e.g. a 401(k) or 403(b). Not only does contributing to these plans help secure your financial future, but it can also lower your taxable income, resulting in potentially a larger tax refund.
Claim Business Expenses:
Small business owners and self-employed contracted workers can also benefit from maximizing tax returns. If you fall into this category, ensure that you're claiming all eligible business expenses. From office supplies to business travel, these expenses can be deducted, lowering your taxable income and increasing your refund.
Seek Professional Help:
Keeping meticulous records and staying organized throughout the year can make tax time much smoother. Seek out directions from a tax professional if you're unsure about any aspect of your tax return. Turning towards the experts can help ensure you're maximizing your refund while remaining compliant with tax laws.
Remember, every deduction and credit counts, so take the time to explore your options and make informed decisions that benefit your bottom line.
*CalCom Federal Credit Union does not provide tax, legal or financial advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or financial advice. You should consult your own tax, legal and financial advisors before engaging in any transaction.