Getting The Most Out Of Your Tax Refund

Are you ready to tackle that age-old question – how do I maximize my tax refund? Good news! You don’t have to figure it out how alone – we’re here to help!AdobeStock_104109333

There are lots of deductions out there just waiting to be taking advantage of. Here’s a sampling:

State and local taxes

State and local income taxes withheld from your wages are deductible, as well as any prior year’s state and local income taxes paid during the year. However, you need to itemize to take advantage of this deduction.

 Un-reimbursed employee business expenses

These include expenses such as travel, mileage, seminars, and publications directly related to your employment. Such expenses are tax deductible if they are more than two percent of your adjusted gross income.

 Tax preparation fees

If you hired a professional, such as an accountant, to prepare your tax return, this expense qualifies as a deduction, as does tax preparation software if you decide to do the job yourself.

 Charitable contributions

Clothing and household items that you donate to charity fall into this category. You can deduct the fair market value of these items. Just make sure you ask for a receipt from the charitable organization you made the donation to. Plus, you may be able to deduct mileage and travel expenses associated directly with volunteering if you helped out your favorite charity during the year.

 Car/boat registration

Were you charged personal property taxes based on the value of your car or boat? That could qualify as a deduction.

 Medical Expenses

If you paid for medical and/or dental care for yourself, your partner, or your dependents, you might be able to write these off as deductions. Such things as lab fees, hospital services, and eye glasses could count as medical expenses, as could parking and transportation to and from a doctor’s office. For the latter, you need to keep a log of the mileage if you’re using a personal vehicle. (More information on this deduction is available from the Internal Revenue Service at https://www.irs.gov/taxtopics/tc502.htmlAs a courtesy, you will be leaving Blog.BankFive.com and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of BankFive.com. Come back soon!)

 Points

We’re not talking basketball or football points, but instead those that are charges to be paid to obtain your home mortgage. Such points are considered prepaid interest, and they can increase the total amount of interest you deduct to purchase or build your home. What’s more, the points paid to refinance a home loan can also qualify as a deduction.

 Retirement Plan Contributions

By making the maximum allowable contributions to a traditional, deductible retirement plan, you can reduce your taxable income for the year.

Speaking of tax returns, before you even get started on yours, you should gather all the pertinent documents and information you’ll need to complete it. These include income documents (W2 and 1099 forms), and expense documents. A tax professional typically will provide you with a checklist of things she/he will need.

Make note that the filing deadline to submit 2016 tax returns is Tuesday, April 18 of this year, rather than the traditional April 15 date. In 2017, April 15 falls on a Saturday. This would usually move the filing deadline to the following Monday, or April 17. But Emancipation Day – a legal holiday in the District of Columbia – will be observed on that Monday, which pushes the filing deadline to April 18. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

And keep in mind that you can find a wealth of information about filing your taxes by going to the IRS website at https://www.irs.gov/filingAs a courtesy, you will be leaving Blog.BankFive.com and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of BankFive.com. Come back soon!.

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