How to Get the Biggest
Tax Refund for 2022
With tax season upon us once again, let’s talk about how you might be able to get the biggest tax refund when you file for 2022. What are some things you can do or take advantage of this year? Let’s take a look.
File With the Right Status
Make sure you file with the correct status. Many don’t, which means they might not be getting all they can from their tax return. Filing as a widow(er) in the event your spouse has passed away might get you twice as much as you expected. This status is available for the first two years after your spouse’s passing. If your spouse is still alive, then it is the best idea to file jointly. The only time a married couple should file separately is if one has medical expenses they’d like to itemize that would be impossible to do so if filing jointly.
If you are single, it is best to file as single, but if you are the sole caregiver of dependents, filing as head of household is the way to go. As head of household, your tax threshold starts higher than someone who files single, so it is to your advantage to file as such, as you will pay less taxes that way.
Claim All Dependents
For however many children you have to claim, you will receive a $2000 child tax credit for each. Be sure to claim them all. If your child is young and in day care, there is an additional tax credit for that, so be on the lookout if it applies to you. Depending on your income, you might qualify for additional credits if your child is involved in after-school programs, sports, summer camps, etc. You can even claim elderly parents as dependents if they financially rely on you.
If you give to charities or make sizable donations, it might be wise to itemize your deductions. This includes a large family giving goods and clothing to Goodwill or the Salvation Army. If you take the time to itemize what you donate, by the end of the year you could easily write off several hundred dollars. Itemized deductions also apply to medical expenses and also office supplies if you purchase items for your job. You can also write off mileage on your car if you need to drive in order to work.
Contribute to Traditional IRA
If you have a traditional IRA (not a Roth), you are able to write off any and all contributions to the account. It is a good idea to make the full contribution allowed for the year, but even if you can’t meet that ceiling, anything you contribute to your traditional IRA can be written off on your taxes.
There are other options for maximizing your return when filing your taxes. This includes claiming a home improvement credit when you upgrade your home with energy efficient investments. You can also max out your contributions to your health savings account. Or you might consider hiring a new accountant. Perhaps it’s time to have another set of eyes on your tax return to see how you might be able to cut even more corners. Sometimes an accountant you’ve had for years isn’t always looking for ways to save you money. Plus, tax laws change from year to year. Having someone new going through your returns might benefit you in the long run.
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