Income Tax Return Refund TipsIt can pretty much be said for all taxpayers that the only thing exciting about paying taxes is getting a tax refund.
While paying taxes is a financial burden, it can be a form of piggybank savings for others that enables them to save some cash they would have otherwise spent.
However, one thing to keep in mind is that this money is NOT accruing interest. In fact you are giving Uncle Sam a tax free loan when you pay in more than necessary and end up with a great big refund.
This overpayment of taxes can be cured quite easily with your employer.
If you're employed full time for a company, when you were hired one of the first things you did was fill out a W-4 IRS tax form.
The information you provided on the W-4 is what is used to determine how much money is being withheld from each paycheck to be paid toward your personal income taxes. This calculation is based on the number of exemptions that you claimed on your w-4. The more exemptions you claim, the less will be withheld for tax payments.
You can use a w-4 withholding tax calculator make changes to the exemptions you claim in order to fit your financial needs better.
W-4 Employee Paycheck Withholding Calculator
If you would like to make an adjustment in the dollar amount you receive for your tax refund, you should visit the personel office or human resources department for your employer and request to make changes to your W-4 tax form.
By reducing the number of exemptions you claim on that tax form, you increase the amount of money that will be withheld from your paycheck every payday. Your income tax refund will therefore be larger. On the other hand if you increase the number of exemptions you are claiming, less money is withheld from your paychecks reducing the overall amount of money you will get for your refund.
Other Tax Refund Adjustments Are Influenced By:
- Deductions for charitable donations: these can offer substantial tax savings by lowering your overall taxable income. All types of nonprofit donations to 501(c)(3) entities can be eligible for a tax deduction to lower your tax bill.
- Employee purchased job expenses: Some employees pay for job related equipment and expenses out of their own pockets. If the company doesn't reimburse those expenses, they may be deductible on your income taxes.
- Changing your filing status: Your filing status, single, head of household, married
filing separately or married filing jointly, can influence the size of your refund. Some
- Divorce or the loss of a spouse to death
- Married couples generally receive a larger tax refund if filing jointly
- Filing a joint return tends to lower the overall tax bill and can offer some tax breaks unavailable to those filing separately.
- Taking care of kids and aging parents: Fortunately, you can deduct many of the expenses or costs associated with taking care of your dependent children and parents. Another support expense that you can deduct is alimony.
- Healthcare expenses for the family: Consult a tax professional to find out what healthcare expenses can help lower your tax bill.
- Retirement fund contributions: One of the most highly recommended ways to increase your tax refund is to increase contributions to an Individual Retirement Account (IRA). Qualifying IRA contributions will lower your total taxable income. The more you contribute, the less of your income is taxable
Use tax software such as TurboTax to lower taxes
Top tax software programs like TurboTax are always up to date on new tax deductions and credit opportunities that have been affected by changes in laws. This helps to ensure you're taking advantage of available tax credit opportunities.