Everyone knows how important it is to be organized when it comes to doing your taxes. Having all of your documents in once place will make filing your taxes less stressful, and it’ll make your tax professional’s job much easier, but being organized isn’t the only way you can get the most out of your taxes this year.
Knowing what to have organized is important too! Here are 4 tips that will make sure that you get the most money back on your taxes.
Be smart about your retirement contributions
If your employer offers a retirement plan, like a 401(k), make sure your contributing as much as you can. Most employers match your contribution up to a certain amount. If you contribute less, you’re missing out on free money.
You should still be thinking about your retirement, even if your employer doesn’t offer a company plan. Just make sure you bring along your retirement plan information to your tax meeting. Some accounts aren’t affected by taxes, while others qualify for tax breaks.
Consider adjusting your withholding
Getting a massive refund each year may be exciting, but it’s not a smart way to use your money. You’re essentially loaning the government your cash interest-free. If you’re tax situation has changed, you may want to consider adjusting your withholding.
If you are planning to claim the earned income tax credit, the additional child tax credit, or another credit, adjust your withholding so the government takes less from your paychecks. You’ll get a smaller refund, but you’ll also have access to more of your money throughout the year.
Claim every possible credit
There are lot of credits out there. That’s why so many people turn to a tax professional instead of using a quick and easy tax program. You could save big with child care credits, earned income credits, higher education costs, and more. Be willing to comb through the list with your tax professional so you can claim every possible credit you’re entitled to.
Understand your healthcare situation
The Affordable Healthcare Act requires you to report your coverage status at tax time, which means filling out additional paperwork. You and your family must have proof that you’ve had the minimum essential coverage for the year, unless you qualify for a health coverage exemption. Your insurance will send you a form in the mail clarifying this. It’s a good thing to bring with you to your tax meeting.
If you did not meet the requirements of the Affordable Healthcare Act, you’ll likely be required to pay an individual shared responsibility payment for each month that you didn’t have coverage or were exempt.
Tax time can be tricky. Whether you feel organized or not, make sure you contact your tax professional about any questions or concerns you have about your return.
Should you have any questions or concerns regarding the current legislation and how that may affect your personal and business taxes, feel free to give our office a call and we would be happy to talk with you at length about your situation.