Did you know that the Internal Revenue Service collected almost $5 trillion in taxes in 2022 alone? Tax season always carries with it a feeling of dread. You brace yourself for the daunting experience of finding out if you owe the government more taxes or whether you’re getting an income tax return.
While it might seem like things are stacked against you when it comes to your personal income tax, it’s a good idea to learn some essential tax tips to increase your return. The good news is that you’ve found the right guide to learning four great tips to help with your income taxes.
Keep reading this article to learn more today!
1. Consider Your Tax Filing Status
Your filing status can have a major impact when it comes to your odds of getting a tax return from your income taxes. Most married couples make the decision to file their taxes jointly rather than on an individual basis. This might seem like a wise move, but it can have a big impact on your tax returns.
Filing separately is a great idea if you have kids since you can both take advantage of the Child Tax Credit. You can exempt yourself from up to $3,600 in taxes each year if you do this without facing any IRS tax penalties.
2. Use Your Tax Deductions
Many taxpayers make the mistake of not utilizing all of the tax deductions that they qualify for. Look into deducting your state and local taxes if you want to enjoy a greater tax return. Student loan interest is another big money item that you might qualify for when tax season rolls around.
Make sure that you keep good records of your tax deductions. This is especially important with things like charitable donations.
3. Use Good Timing
You can also make use of tax deductions for things that you purchase in the last quarter of the previous year. Certain medical treatments and exams will allow you to get more money back for medical treatment deductions.
It’s also a smart move to look at purchases that you can make that will qualify for deductions if you’re self-employed and filing your taxes. Upgrades like new home office equipment will allow you to upgrade your workspace without paying more money.
4. Enjoy Tax Credits
Many Americans fail to use tax credits to their benefit when they file their personal income tax. The Earned Income Tax Credit is one of the best options even if you don’t have any dependents or children. A failure to claim your tax credits will result in you leaving money on the table.
Make the Most of Your Income Tax Return in 2023
Paying your income taxes isn’t anyone’s idea of a good time, but there are things that you can do to make your money go further. Using tax credits is a great way to bolster your income tax return. You should also look at the benefits of your filing status to save money on your income taxes.
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