March 5, 2013
Tax season is in full swing, and many families are gathering all their information to help them calculate how much of a refund they’ll receive this year.
Families have several opportunities to qualify for tax exemptions or refunds, which can add up to a sizeable refund check from the federal government. If you’re expecting a refund this year, be sure to put it to good use. For example, if you have any outstanding credit card, direct lender payday loans or other debts, consider using the refund to pay those off first. Or consider saving the refund money as an emergency or rainy day fund.
Here are some deductions you might qualify for to help increase your refund:
* Homeowners and renters alike often are able to take deductions for mortgages on federal taxes and for rent payments on state taxes. Homeowners may be able to deduct specifically the amount they paid for mortgage insurance premiums. And states have varying requirements for deducting rent payments, so be sure to review the tax codes for your specific location.
* Making donations to charitable organizations can add up to a larger refund when you itemize your taxes. Some donations people tend to forget about include: donating clothing or household goods, keeping track of mileage driven for a non-profit organization as well as spending your own money to make food items that benefit a charity.
* If you work from home, or often take your work home with you, you might be able to deduct business expenses. If you need to purchase any equipment for your home office use, these items usually can be deducted. And if you’re driving somewhere for work, be sure to track the mileage for taxes (if your company doesn’t already reimburse you for those miles).
* If you are self-employed, you might be able to write off the premiums you pay for medical insurance, including dental and long-term care for yourself and your family. This write-off is a little different than a deduction – it is used to lower your adjusted gross income, which might put you into a better tax bracket.
* Making energy-efficient upgrades to your home can also benefit you when it comes time for taxes. Some improvements include insulation, water heaters, and exterior doors and windows. If you’ve applied for this deduction in past years, you will have to subtract what you’ve already received from what you qualify for this year.
While preparing your taxes, be sure to maximize your refund. Hopefully some of these tips will help you out. Before using any of the above tips, please contact your tax professional to determine whether any of the above tips will work in your circumstance.