Financial experts give tips on how to maximize your tax refund

With the arrival of tax season comes the chance to receive a tax refund beacon of monetary reward according to many individuals. The approach you’re taking throughout the application process can significantly impact the dimensions of your refund, and financial experts highlight key strategies to optimize your refunds.

One of the important thing decisions for tax filers is selecting between standard deductions and itemized deductions. The standard deduction, set this 12 months at $14,600 for single people and $29,200 for married people, provides a direct reduction in taxable income.

However, itemized deductions, which include expenses equivalent to charitable contributions, gambling losses and mortgage interest, may exceed the usual deduction for some people. Dan White, founding father of the financial consulting firm Daniel A. White & Associates, notes that while the usual deduction is preferred for many filers due to its expansion within the 2017 tax change, those electing to itemize deductions should consolidate eligible expenses into one calendar 12 months to maximize the deduction.

In addition to deductions, tax credits offer one other opportunity to increase your refund. Gregory King, an authorized public accountant and tax specialist on the financial advisory firm Empower, highlights the usually ignored importance of tax deductions. “Everyone usually thinks about itemizing their deductions to increase their refund, but many people forget to check their tax deductions, and that can make a big difference,” King said.

For example, the Electric Vehicle Tax Credit, providing up to $7,500 for qualifying vehicles, and the Home Energy Efficiency Tax Credit, offering a 30% rebate on renovation costs, could significantly impact returns. The child tax credit, currently $2,000 per child, could also increase to $3,600 if the most recent legislative measures are passed.

Contributing to a retirement account is proving to be a reliable tax-saving method. Contributions to accounts equivalent to 401(k)s and traditional IRAs are tax-deductible, offering the twin good thing about reducing your taxable income and financially securing your savings for the long run. Financial advisor James Cox of Harris Financial Group encourages individuals to benefit from this chance before the April 15 tax filing deadline.

Finally, while it’s too late to impact the present tax season, making tax-deductible donations generally is a consistent strategy for future returns. Experts advise strategically planning your contributions to align with your financial goals.

As tax filers come to grips with complex deductions and credits, insights from financial experts may also help them claim a more significant tax refund, providing a welcome financial boost during tax season.