This time of the year is a busy time, with the holiday season upon us, Christmas shopping to do, family gatherings and of course preparing for tax season. Tax season for most middle class Americans is a time of the year for a windfall of money in the form of their tax returns, money which helps many Americans recover financially from the holidays and pay down debts or even better yet to build up their savings account. Your tax refund can even help you catch up on your bills and any outstanding loans you have. If you like many Americans rely upon your tax refund there are steps you can do throughout the year to maximize your tax returns. If you follow a few simple tips you could minimize your tax liability to increase your over all tax return come tax time. Here are a few things you can look into right now to maximize your tax refund.
If you time your big payments or purchases this can make a huge difference come tax filing time. This is more pronounced come December when for example you could pay January’s mortgage payment during the month of December which could get you an additional interest deduction on your tax return. If you have a medical expense due in January or any medical procedure you can also get it done in December and use that for your medical expenses deduction on your tax return. It is all about maximizing your deductions by timing your big expenses that may not be due to early into the new year by moving them up to the end of the current year. If you have these expenses anyway it can benefit your greatly here and now to tackle them as quick as possible.
You should also thoroughly look over your 2013 tax return and look for anything you might have missed that could be included in the 2014 tax return. Every year millions of Americans miss important tax deductions. The tax code is very complex, in fact in 2013 the U.S tax code sits at 73,954 pages! That is more than any sane human could read in one year so do take advantage of tax software programs, tax professionals, and online tax advice websites to look for any deductions you may have missed.
If you make a lot of money or are close to being in a lower tax bracket there is something you can do today to lower your tax rate and potentially your tax bracket. Contribute to an IRA, not only will this help set you up for retirement but it also will help you reduce your tax burden as every dollar you contribute is non taxable income, so if you place $5000 in your IRA that is $5000 less that you can be taxed on. For 2014 you are capped at $5500 if you are under age 50 and $6500 if you are aged 50 or older.
Consider using free or inexpensive ways to file your tax return, especially if you feel that it could help you find any missed opportunity’s for tax deductions. If your tax return is going to be simple and not have many deductions then consider using a free filing service or software to save money on the tax filing fees. To sum things up look for any missed opportunity to maximize your tax return.
Brought to you by the editorial team from Installment Loans Network, a leading consumer portal offering installment loans and consumer advice for personal financing, debt solutions and credit in 2015.