It is officially one month until Tuesday, April 15: the deadline for filing your taxes. Now is the time to get organized, get your W-2s and receipts together, and to look back on anything that may have changed over the past year, such as buying a home, getting married, having a child, or going to college. Whether you file your taxes yourself, or you use an accountant, be sure to be completely honest, and also be smart about what you can and cannot deduct. Here are some tips for filing your taxes, finding deductions you may not have even thought of, and getting the maximum return:
Don’t Forget Your W-2
Surprisingly, many taxpayers forget to send in their W-2 form, and this could cost you additional taxes plus interest, because it could take a long time to process your file. Be sure to report all of your income to avoid being audited, and pay attention to the details on forms, including making sure that there are no errors or typos.
If you know you are going to receive a tax refund, file electronically. The IRS processes electronic returns about three to six weeks faster than paper returns.
Deduct Charitable Donations
If you donated anything to a charity or not-for-profit organization, including cash, driving, and property like furniture, real estate, clothing, vehicles, electronic equipment, or office supplies, you can deduct it for significant tax savings. You must have receipts for all charitable donations that were over $250 in order to claim the deduction, and the not-for-profits must be based in the United States to get any money back. Charitable deductions must be itemized using Form 1040, Schedule A.
Deduct Professional Expenses
If your company does not reimburse you for expenses necessary for work, you may be able to claim these costs as deductions. Professional dues like those for unions and professional organizations can also count towards professional expenses. Be sure to check with a professional accountant to find out if your expenses count, as some expenses, such as uniforms and travel, often are not applicable for deductions.
Deduct Your Child (and Senior) Care
Many child care expenses are deductible, as you have no choice but to care for your dependents – whether they are your children or aging parents. You can consider your parents to be dependents only if you are responsible for more than half of their financial support. Parents cannot deduct child support, but alimony is tax deductible. Certain healthcare expenses can also be tax deductible, but be sure to check with your accountant first.
Update Your Filing Status
If you were divorced within the past year or became widowed, you are eligible for a larger tax refund. Married couples can typically expect a larger refund if they file their taxes jointly - if you're a newlywed, be sure to update your filing status this year!
Deductions for the Self-Employed
If you are self-employed, the cost of your health insurance (and the health insurance for your family) is deductible. If you use your vehicle for work, be sure to check over costs for car repair and mileage for business purposes, because this can mean getting an even larger return.