Five Tips for Increasing Your Tax Refund

Five Tips for Increasing Your Tax Refund

September 3, 2020

The highest income tax returns in Hayward, CA result from making the best of tax law to minimize your taxable income. Many of these tips reduce your tax burden and increase your refund by decreasing your taxable income. There are other decisions that could benefit your tax return as well. Here are five tips for increasing your refund:

  • Find business expenses: Deductions for business expenses are not limited to the self-employed. Even if you have a regular W-2 income, unreimbursed business expenses may be deductible. Check to see if you have any ordinary and necessary expenses that arose from traveling away from home for your job. This can include seminars, conferences and even driving across town to consult with a new client.
  • Make charitable donations: If you made donations to any qualifying nonprofit, they may be deductible. Keep receipts for all donations and donated items. You cannot benefit from this deduction unless you keep a record. If you give away clothing, furniture or a vehicle to a nonprofit, itemize your receipt with an estimated value for each item or group of items.
  • Pay your student loans: You should be paying student loans anyway in order to keep your credit in good shape. However, student loan interest can also be deductible. If your parents are paying your student loans, you can claim the interest as a deduction on your tax return as long as they do not list you as a dependent. Also, if you are married and file jointly, you can claim up to $2,500 as a tax deduction. However, this does not apply if you do not file a joint return as a married person or you or your spouse are listed as dependents on someone else’s return.
  • Check all available tax credits: Tax credits are more effective at reducing your tax burden than deductions. Every year, it’s worth the effort to see if you qualify for any tax credits. The Earned Income Tax Credit, Child and Dependent Care Credit, Child Tax Credit and the Additional Child Tax Credit apply to particular income and family situations. If you are pursuing an education, the Lifetime Learning Credit and American Opportunity Tax Credit may also apply to you. Your best course of action is to meet with a tax preparer if you believe you meet requirements for a tax credit program and want to ensure it’s considered when you file.
  • Consider itemizing: When you file, you have the choice between the standard deduction and an itemized deduction. The standard deduction is applied generally and does not include any expenses. However, there are cases when itemized deductions may work better for you. If you incurred substantial out-of-pocket dental or medical expenses, paid interest or taxes on your home or personal property, faced large losses due to theft or casualty or made a big donation to a charity, it is likely in your best interest to itemize. Otherwise, the standard deduction likely still applies.

Menjivar & Company CPAs, Inc. offers the expertise to help those seeking the highest income tax returns in Castro Valley, CA. If you would like tax time to be less harrowing, contact us today to schedule an appointment and see if any of these tips will work for you.

Categorised in: