How to Score Some Extra Cash This Tax Season
Tax season can seem like a drag. It takes time, paperwork, and a lot of mental energy whether you do it yourself or hire a professional. But by just making a few small changes and planning ahead, you can maximize your refund. One way to get motivated to do your taxes is to think about all the ways you can spend that extra money. Getting a big refund could mean extra money for a down payment on a house or a car, or maybe even that dream vacation. Here are some steps you can take to get some extra cash this tax season:
Double Check for Accuracy
Taxes can take a while to process, especially if you wait until the deadline when everyone else is filing their paperwork. But nothing holds up your taxes like mistakes and errors. And little mistakes could mean you get less of a refund. So, before you submit and file your taxes, go back and make sure everything is accurate, including your name, address, and bank account information. Double check every number too.
File Old Returns
If you neglected to file any returns from the past three years, now is your chance to do it. The IRS will allow you to collect refunds on any of those returns as long as you file them within three years. If you’re not sure whether you’ve filed, you can always check the IRS website. And in the future, make sure you file on time and keep good records.
Use the Right Filing Status
If you’re single and have never been married, you’ll need to file as Single. But for those who are married or widowed, you have options regarding your filing status. Each filing status has its own benefits and will determine the amount you get back as a refund. If you are e-filing, try out the different statuses you qualify for to see which one maximizes your return. If you’re working with a professional, they will be able to help you choose the best filing status for your situation.
Fund Your Accounts
Funding certain accounts like IRAs, 401ks, and HSAs can help you get more money back from your tax return. For example, the funds you add to retirement accounts can qualify you for a Saver’s Credit, which can reduce the amount you owe in taxes for the year. And contributions to Traditional IRAs and HSAs can reduce your taxable income. Funding those accounts before filing can definitely make an impact on the amount you get back from your taxes.
Report All Your Income
The IRS receives documentation from the employers, agencies, and organizations that paid you during the year. Any contradiction between what you file and what they have documented can raise flags and delay your refund. Make sure you’ve gathered all the right documents before filing, including interest statements and any 1099s.
Meet Deadlines
The most important factor in maximizing your tax refund is to make sure you file your taxes on time. You have until April 15th, but the earlier you file, the better. Filing early means faster access to your money. As the deadline looms closer, the IRS takes longer and longer to send out refunds. Plus, if you’re late filing taxes, you’ll risk the potential to be fined.
