4 Ways to Get a Bigger Tax Return

April 2, 2021

If you haven’t filed your tax return yet, take a moment to relax and breathe. You still have time to file, and there are numerous ways to enjoy a bigger return. Review tips from your Encino tax consultants that will help you maximize your refund. 

Don’t Take the Standard Deduction

While the majority of taxpayers choose the standard deduction because it has doubled thanks to tax reforms, it’s still a good idea to consider itemization. Compile your receipts and lists of charitable donations, as you might be over the standard deduction and subsequently do not have to pay as much in taxes. Ensure all applicable expenses and donations are covered, such as a refinanced home loan or theft losses. 

Use the Right Filing Status

There are five filing statuses to select from when doing your taxes, including married and filing jointly, single, head of household, married but filing separately, and qualifying widower. Filing as the head of your household offers tax benefits, such as lower taxable income; however, you must meet certain criteria. To file as such, you must have a child or other dependant, such as an elderly parent, live with you for at least six months, and pay more than half of the costs for your home’s upkeep. You must also be unmarried on December 31st of the tax year you’re filing for. 

Contribute to Your Retirement Fund

Contributions to retirement funds like IRAs offer tax benefits, and you can make a deduction up until the filing deadline for the 2020 tax year. By making a contribution of up to $6,000 or up to $7,000 if you are over 50, you could qualify for a saver’s credit of up to $1,000. That credit doubles if you are married and filing jointly. 

Claim the Earned Income Credit

The Earned Income Tax Credit provides assistance to individuals who are self-employed and or earn moderate to low income. The credit lowers the amount of taxes you owe and can help you qualify for a refund if you are a U.S. citizen, have a valid Social Security number, are not being claimed as a dependant by any other taxpayer, and have a qualifying child. You must also be between ages 25 and 65 and have lived in the U.S. for at least half of the year. Non-resident aliens married to U.S. citizens or resident aliens can also qualify for this credit, as can resident aliens who have lived in the country for at least one year. 
For more tax help, contact Wallace & Associates, your Los Angeles accounting firm.