When it comes to tax season, most people are either overjoyed or stressed out. If you need to pay the IRS money, you have probably put that out of your mind until the tax man calls. This is the time of year when you are thinking about your life, job, family, business ties, and much more. There are a lot of elements to taxes, but if you work towards getting the most out of tax rewards, it can be an exciting time of year. Whatever your situation is, there are plenty of ways to pay the IRS less and get more back when April 15th comes. Below is a guide to help you get the most out of your tax refunds.
Don’t Withhold Tax Earnings
It’s tempting to receive all the money from your checks and pay the IRS later. However, this is a short-sighted way to think about it. When you don’t pay the taxes out of money you are paid from your employer, it feels a lot more like the IRS is taking from you.
Some people do this to get a more accurate view of their taxes and ensure that they are only paying what they need to pay, but for most people it’s a huge bummer when taxes are due. So, whether you are working a well-paying salary position or are struggling to get by with hourly wages, you shouldn’t withhold your taxes that will need to be paid later.
Make Sure to Claim Your Dependents
Do you have a family? Are you taking care of your parents? If you have children, are caretaking for the elderly, or are taking responsibility for someone who isn’t a part of your family, you should be sure to claim your dependents. Dependents are—you guessed it—people who depend on you. You can receive a tax write-off for each of these people.
Each dependent can represent up to $2,000 back on your taxes. This can greatly come in handy. If you owe the IRS a few thousand dollars, you can greatly benefit from filing the dependents. Plus, if you are caring for people who don’t pay taxes, you deserve it. There’s no reason not to take advantage of the benefits you have for doing a good thing. Whatever the situation, you should make sure to claim your dependents and get up to $2,000 deducted from what you owe.
Exhaust All Write-Offs
Claiming dependents is one form of write-off, but there are plenty more. Have you given to charity this year? Charitable donations are a great way to do the right thing and get a tax write-off benefit for doing so. You can deduct this money from your income. Are you in business?
There are so many different options for write-offs. Depending on how much money you are paying employees, what part of your income was used for other things, and what you do with your own money for company purposes, there are many different ways to get money back. For example, if you drive for work—whether it’s a rideshare job, a delivery service, or something else—you can calculate fuel, wear, and tear from the past year and deduct that off your taxes. Look at the list of write-offs from the IRS website and consult tax experts to see how you can benefit.
Consult the Tax Experts
Is your tax situation more complicated than you can handle? This is common for so many people. In fact, it is almost purposefully created this way. If you aren’t a tax expert, there is likely something you are missing. That’s why if you are dealing with a lot of money and complex taxes, you should consult professionals. Of course, if you are a single person with one job, no dependents, and no property, you won’t need to work with anyone, but it doesn’t take much for consulting experts to be worth it.
Whether you own a business and property, have multiple dependents and other write-offs, or just want to have a clearer view of what your taxes are, there are plenty of reasons to consult the experts. You can work with a private tax corporation, a CPA tax advisor, or your personal financial consultant to find out the best ways to overcome taxes, get the most back, or pay less to the IRS. You will need to pay them a fee, but if you are benefitting a lot from their services, it will be worth it.
Use Property to Your Benefit
Real estate, property taxes, and the mortgage industry can all have an effect on your taxes. Whether you own a home, are currently in the process of buying one, or need to refinance your mortgage to keep more money in your pocket, there are many ways that property can both be a detriment and a benefit to your taxes.
For example, a mortgage refinance is typically a secured loan that provides financial benefits based on the collateral used from the property itself. Reverse mortgages offer money back that isn’t taxable. You might have to pay taxes on your property, but your mortgage loan can be negotiated to cover that if you don’t currently have the cash. Property can be a disadvantage when it comes to taxes, but if you have equity in the purchase you might be able to benefit greatly from it. It’s all about focusing on taxable and non-taxable funds.
Taxes are complicated, and the above guide is just the beginning to the ins and outs of it. Whether you are a single person trying to get more back on your return, a family trying to leverage dependent write-offs, or a business looking for the best way to gain deductibles, there are plenty of ways to get the most out of your taxes. Whether you want to decrease the amount you owe to the IRS or increase your return, the categories above are a few good places to start. The more you invest in doing your taxes, the better it will pay off. You just need to know what you are doing!