It is really painful to pay taxes to the government, especially when you are made to part with your hard earned money in the form of income tax. If you have a tax ID number, you are required by law to file your annual tax return on time every year. Thankfully, there are many simple ways using which you can get higher tax refunds. Read on if you are looking for ways to pay as little as it is legally possible in the form of income tax.
Ask a professional to prepare your tax returns
It has become very easy indeed to file your tax return these days, especially with the availability of many apps on the internet. However, you can save much more than you have to spend on hiring a professional to file your returns. These pros not only know about tax rates much more deeply that you, they also know how to make use of a loophole in the tax laws to save money in your favor. You get immense tax help from these professionals as they are aware of all the constant changes and revisions of the tax laws.
Know about your deductible expenses
You can get deductions under many categories of expenses such as those related to education, job hunt, property tax, health care expenses, renovations of homes, interest paid on mortgage loans, and so on. You can also save if you have made expenses to make your home more energy efficient. There are deductibles for expenses incurred for business travel also. Many people fail to mention their deductible expenses with the result that they end up paying more tax than they should.
Keep track of your charitable donations
If you pay donations to charitable organizations frequently, it is prudent to ask for receipts as they can help you in getting a refund on your annual tax return. You will be surprised to know that can claim deductions under this head for up to 50% of your gross annual income.
Consider your filing status
Most people prefer to file tax returns jointly with their spouses when they are married. However, it is not always the best way to file your tax returns, especially if you are desirous of higher tax refunds. It may be cumbersome to file returns under married-filing-separately category, but your effort is certainly worth it if it can boost your tax refunds.
Have you suffered losses on your stocks?
If your investment on stocks did not turn out to be profitable and you suffered losses, you can use these losses as deductibles under the section of capital losses.
There is no use asking where’s my property tax refund after filing your tax returns as you need to mention the rent you paid in the year to your landlord.