Expert Tips and Tricks To Get The Most Of Your 2016 Tax Return
Many people disagree about how their taxes are spent, but almost everyone wants to know of ways that they can pay no more than owed or to boost their tax refund. In general, a lot of tax specialists will recommend five different strategies that think outside the box and go above and beyond the obvious ways of lowering tax liability. The decisions you make when completing your tax return will have an impact on the size of your refund, and this becomes especially true of those who are married.
Secret Deductions for Married Couples
While the majority of married couples file a joint return, this is not always recommended or the most beneficial choice for boosting your tax refund. It does take more effort for married couples to file separately, but under the right circumstances, it leads to greater tax savings. When it comes to the IRS, they use a percentage of your adjusted gross income, also referred to as AGI. This determines whether the deductions of medical and miscellaneous expenses can be used. When you file separately, it lowers your AGI, and if one of the spouses has many medical expenses like COBRA payments, doing your taxes individually lets you reach the AGI based on your income.
Filing separate does not always have benefits, however. If you do decide to file separately, beware that you can lose credits available to a joint filing, and you have to weigh these things out to maximize your refund. If you have a husband or wife who spends a lot of time traveling, you could be entitled to deductions like baggage fees and fuel expenses when you file separately. It depends on your situation.
Are You a Single Parent?
When you have children, you can claim dependents as a single parent, and that will have a drastic impact on your tax bill. However, you will need to have one or more children living with you for more than six months, and you have to have paid over 50 percent of the cost in keeping the home. The possible deductions include:
- Renter’s Insurance
In addition, if you take care of an elderly parent, you might also qualify for tax deductions because you are the head of the household. However, you have to have paid for more than half of the cost in maintaining your parent’s home. You do not necessarily have to live with them, but when you pay half of the cost for them, you can claim head of household on your 2016 tax returns.
Never Shy Away from Deductions
While charitable donations that go to a church or other cause are great deductions, you have to itemize and keep records of these things, or it will be useless. You should also keep record of the market value of household clothing and other items that you donate for more deductions. These are some of the ways to save money on your 2016 tax return.
Whatever deduction you might have, never be afraid to put it in. For example, if you do volunteer work or go to doctor’s appointments, those miles will add up. You should log them and keep your receipts to support your claims. With a record of the miles driven, it lets you write off the mileage for these travels on your taxes. If you had to move away for a new job that was 50 miles or further, you could be entitled to a boost in your refund because you can deduct storage and travel expenses. Nevertheless, you have to work full-time at this new job, and you have to be there for 39 weeks during the first year.