If you are like most people, you may be wondering, “how do I maximize my tax return?” While filing your taxes is a tedious process, it is crucial to pay attention to the way you file your return. How you file your taxes plays a large role in how much you receive back as a refund. It is important to pay attention to what you report on your tax return, such as tax credits, deductions, and dependents. Make sure you take advantage of every available tax strategy to reduce your tax liability, as this is the best way to boost your tax refund.
At Bennett CPA, a certified public accountant in Colorado Springs, Merrill Bennett has extensive experience working with individuals and small businesses to file their tax returns. With a thorough understanding of tax preparation, planning, and consulting, Bennett provides affordable, accessible, and quality tax services across southern Colorado. With individual or business tax services from Bennett CPA, Bennett will work with you to strategically find the best tax credits and deductions to maximize your tax return.
If you want to know more about how to maximize your tax return, keep reading to learn the top five best tax preparation tips to get the biggest refund.
1. Claim Dependents
One of the best ways to maximize your tax return is to claim dependents. A dependent is someone who relies on you for financial support, such as a child or a family member. It is important to note that dependents do not have to be related to you to be claimed on your taxes.
Why are dependents so significant for tax purposes? Because properly reporting a dependent on your tax return can reduce your tax liability remarkably. There are many tax credits and deductions available to individuals claiming a dependent, such as:
American Opportunity Tax Credit
Lifetime Learning Credit
Child and dependent care expenses
2. Report Itemized Deductions
When you file your taxes, you can either take the standard deduction or itemized deduction. The standard deduction is a dollar amount that reduces your tax liability.
For the 2022 tax year, the standard deduction is $12,950 for single filers and individuals married filing separately, $19,400 for individuals filing head of household, and $25,900 for individuals married filing jointly.
However, if your itemized deductions are more than the standard deduction, you should itemize your deductions instead of taking the standard deduction. This will lower your tax liability more. Be sure to include deductions like mortgage interest, medical expenses, and charitable donations.
3. Claim the Earned Income Tax Credit
The Earned Income Tax Credit is available to tax filers at lower to moderate income levels. From families with children, self-employed individuals, and working single filers, many individuals can claim this tax credit to lower the amount of taxes owed.
In order to claim the Earned Income Tax Credit, you have to meet the basic requirements set forth by the Internal Revenue Service:
Be a U.S. citizen or resident alien all year
Have a valid Social Security number
Have income from employment, self-employment, or farm work under $57,414
Have investment income below $10,000
Not file with a Form 2555
4. Check Filing Status
Did you know that your filing status has an impact on your refund? It is vital to select the filing status that best suits you. There are five tax filing options to choose from: single filing, married filing jointly, married filing separately, head of household, and qualifying widow with dependent child.
Your tax filing status is extremely important because it affects many aspects of your taxes, such as:
Your standard deduction amount
Your filing requirements
Type of eligible tax credits
The amount of tax you pay
The amount of your refund
This is why it is important to work with a tax professional who can help you determine your filing status.
5. Find Tax Credits
When filing your taxes, make sure you take advantage of eligible tax credits! By finding all the tax credits that you can claim, this ensures that you do not overpay your taxes and that you get the maximum refund.
There are many lesser-known tax credits that a majority of people have no clue about when filing their taxes. Here are some examples of tax credits that you may be eligible to claim on your tax return:
State sales tax
Student loan interest
Moving expenses for military personnel
Jury fees paid to employer
Maximize Your Tax Refund With Bennett CPA
When filing your taxes each year, it is crucial to ensure that you are filing accurately to avoid overpaying in taxes and to receive a maximum refund. The best way to file your return to maximize your refund is to ensure you are completing your tax return as thoroughly as possible. For example, make sure you claim eligible dependents, itemized deductions, tax credits, and the proper filing status because these have a significant impact on the amount of your tax refund. By following these tax strategies, you will have the best chances of reducing your tax liability and getting back a refund!
At Bennett CPA, Merrill Bennett offers the best tax preparation services for individuals and businesses in Colorado Springs and beyond. Bennett will work with you to understand your financial situation to create a customized tax plan to minimize your tax liability and maximize your tax refund. With professional tax services from Bennett CPA, you can have peace of mind knowing that your taxes are being completed correctly, efficiently, and with the least impact on your finances. If you have any questions about how to maximize your tax refund, or if you want to file your taxes with Merrill Bennett this upcoming tax season, contact Bennett CPA!