End of Year Tax Tips To Increase Your Tax Refund

December 21, 2018

If you want a bigger tax refund when April rolls around, it’s not too late to take steps to maximize the amount you get back. Los Angeles accounting experts recommend these four year-end tax tips to increase your IRS refund.

Reconsider Your Filing Status

The vast majority of married couples opt to file a joint tax return, but you may get more money back by filing separately from your spouse. If you aren’t sure what’s better for you, try calculating your refund both ways with the help of Los Angeles tax preparation services.

Get Organized

If you plan to itemize your deductions, you’ll need to have receipts and paperwork to support the information provided on your tax return. Start pulling together the necessary items now to ensure that you don’t forget anything when it’s time to see your CPA. Keep in mind that the standard deduction has been raised from $13,000 to $24,000 for married couples, so it might no longer make sense for you to itemize your return.

Defer Year-End Income

If you are expecting to receive a healthy holiday bonus, talk to your employer about deferring it until the new year so it won’t impact your 2018 taxes. Freelancers can also use this tip for client billing to reduce the amount of taxable income for 2018. Keep in mind, however, that this will increase your 2019 taxable income.

Max Out Retirement Savings

When you contribute to an employer-sponsored 401(K) plan, your taxable income is reduced by that amount. Consider contributing the maximum for 2018 ($18,500 or $24,500 for those older than age 50) to get a larger tax refund. You can also max out contributions to your Roth IRA up to $5,500 or $6,500 if you are older than age 50.

A qualified Los Angeles accounting firm can advise you on the best steps to take for your specific tax situation. With these tips, you’ll be able to boost your refund to use for savings, vacation, home improvements or additional investments.