Tax Season 2018 is well underway. What you are going to do with your refund? Or are you holding back because the the thought of doing your taxes seems dreadful? Here are some helpful tips to maximize your 2018 refund and get you through this Tax Season.
1. Don’t Wait Till the Last Minute
Sometimes, filing taxes requires a lot of documents. You may need a document from the bank showing how much interest you have paid on your student loans, mortgage, or even Investment income information. If you do not start as soon as possible and gather all the documents you can, you risk not getting the highest refund possible. Some of the documents you will need when filing your taxes, according to www.irs.com:
- Your Social Security number, your spouse’s Social Security number (if you’re married), and Social Security numbers for any dependents.
- W-2 Forms from all employers you (and your spouse, if filing a joint return) worked for during the past tax year.
- 1099 Forms if you (or your spouse) completed contract work and earned more than $600.
- Investment income information (including: interest income, dividend income, proceeds from the sale of bonds or stocks, and income from foreign investments).
- Income from local and state tax refunds from the prior year.
- Business income (accounting records for any business that you own), unemployment income, rental property income, and miscellaneous income (including: jury duty, lottery and gambling winnings, Form 1099-MISC for prizes and awards, and Form 1099-MSA for distributions from medical savings accounts).
- Social Security benefits
2.Organize Your Documents
There is nothing better than to easily find something when you are looking for it. Use services like Google Drive, Amazon Cloud Drive, or Dropbox. This is where you can securely store and access your receipts, documents, spreadsheets, and notes for your 2017 tax year.
Keeping everything in a centralized location that is accessible from multiple devices helps you stay organized wherever you are. This will also help you down the road if you ever get audited. Read here for more tips like this on organizing your tax documents.
3. Invest in your IRA
Contributing to your IRA reduces your taxable income which reduces your tax liability. If you don’t already have an IRA then consider setting one up. You can do it online or at your local bank. The maximum you can contribute to a personal IRA for tax year of 2017 is $5500. You can contribute less than that and still get a nice tax break.
Other practices that can increase your chance of receiving a tax refund, according to www.irs.com, include :
- Homebuyer tax credit
- Green energy credits
- Mortgage interest
- Student loan interest
- Medical Savings Account (MSA) contributions
- Self-employed health insurance
- Moving expenses
For more unusual tax breaks, tax deductions, and tax exemptions read our blog post, Which items & services are tax deductible?
4. Consult a Tax Professional
Messing up your tax return then having to deal with the state or IRS is time consuming. Getting your taxes done in a timely manner while keeping you involved requires someone who can explain the process to you in plain english. It also requires someone who is trustworthy, available, and knows what they are doing. The best way to find a good accountant is to ask friends and family who you personally trust. Reach out to someone who is doing well financially and ask them for a referral.
You can also use the Services channel on 5miles to find an accountant based on reviews. If you yourself are an Tax Professional, feel free to post your skills and find clients through the Services channel!
5miles would love to hear about how you how you maximized your tax refund! You can get even more out of your refund when you use the 5miles marketplace to buy like-new or secondhand items and local services for less than you might elsewhere. Comment on this blog or connect with us on Facebook, Twitter or Instagram and tell us your 5miles buying and selling story.