As the end of the year approaches, individuals gather all of their tax information for 2008. Many Americans often miss deductions that would help them get the maximum tax refund. The following is a list of tips to get the people gets the refund they deserve, a refund that would appreciated in this economy.
1) The first thing to do is make sure that your employer has not been taking too much money out of your paycheck. Individuals can find this information by using the withholdings calculator on the IRS website. Employees loss thousands of dollars each year and don’t receive their maximum tax refund because of this kind of oversight.
2) In order to get the maximum tax refund, avoid taking advantage of rapid refund services. First of all, they don’t send your refund any faster and they often have high interest rates that range from 40 to 700% APR. Instead, exercise patience and get the deserved amount of money.
3) Take advantage of free tax filing services in your area. Many community organizations offer free tax serviced to low-income individuals or the elderly. Some agencies offer free services to individuals who file within a designated time period. In order to find out if these services are offered in your location, search the city’s website or visit the IRS website.
4) Use free online tax preparation services and cut out the middle man. This service is especially helpful for individuals who are filing the 1090EZ form and have basic deductions. The IRS website provides links to free online tax filing services
5) If individual experienced stock losses this past year, they can deduct excess losses on investment sales against ordinary income of up to $3,000. Those who have not reached that limit may consider selling some securities by the end of 2008 to take advantage of this option.
6) Many people don’t claim all the tax credits available to them. By claiming tax credits, they get the maximum refund. The different types of tax credits include Earned Income Credit (EIC) for low-income taxpayers, Child Tax Credit for children up to 17, Child and Dependent Care Tax Credit. Some private and independent schools and institutes of higher education also offer tax credit options. This tip could place thousands of dollars in your pocket.
7) Charitable donations can also be included on your tax return to maximize your refund. These donations include money, clothing, and household items. Charitable donations reduce the adjusted gross income on tax returns.
8) Even job search expenses can be included on tax returns. This will no doubt make a lot of people who have survived 2008 happy. These deductions include the cost of resumes, phone bills, career counseling, and travel back and forth from interviews.
9) Medical expenses can also deducted on tax returns. Although the threshold for medical deductions is high, if a taxpayer has accumulated a lot of medical bills, they may qualify. This could be a welcomed relief to individuals with little or no health insurance.
10) Even real estate can be deducted from taxes. Interest on mortgage and refinancing are eligible for tax deductions. A person cam even get a tax refund for the sale of a residential home.
11) If a taxpayer’s home has been damaged as a result of a natural disaster or theft, they may be able to deduct any cost not covered by insurance.
Of course, these are just basic ways to get a maximum tax refund and each has a number of stipulations associated with them. In order to see if you qualify for any of these, visit the IRS website or talk to a tax advisor.