Six Steps To Maximize Your Tax Refund

Preparing For Tax Day

Six Steps To Maximize Your Tax Refund
February 17, 2017

Does your preparation for tax day start with a trip to the liquor store, or perhaps a one-way ticket to Costa Rica? Taxes are unpleasant, but drinking or fleeing the country is not the answer. Tackle your taxes head-on with solid preparation, and the experience may turn out to be more pleasant than you thought it would be. Here are a few tips to help you with your tax preparation and increase your chances of getting the biggest refund you deserve.

1. Start Immediately – Procrastination is just going to make things worse. Pressure will increase as tax-filing day draws nearer, and it is more likely that you will have problems finding vital paperwork or will make mistakes filling out your form. Get started on your taxes as early as you can and gather some positive momentum.

2. Organize Your Paperwork – Hopefully you have been storing and organizing important tax documents and necessary receipts throughout the year — but if so, you probably would not be reading an article about how to prepare for tax day.

Start by gathering the basic tax documents. Last year's tax return, W-2 forms, 1099-MISC forms for any independent contracting work, other 1099s forms for things like bank accounts and brokerage statements, and 1095 forms to prove health insurance status. After securing all the basic documents, move on to receipts for all itemized deductions. Speaking of deductions....

3. Explore Deductions – You may not even realize how many itemized tax deductions that you have, and simply assume the standard deduction is the best choice. Review the instructions for Schedule A and IRS Publication 529, "Miscellaneous Deductions" to see all the options available to you.

Do not forget about "above-the-line" deductions like educator expenses and health savings account (HSA) deductions. You can take those deductions whether you itemize or not.

4. Max Out Your Retirement Contributions – Even though it is now 2017, you can still make contributions to your IRA until the tax-filing deadline in April and credit those contributions to your 2016 taxes — as long as your contributions for the year stay within the $5,500 limit ($6,500 if you are over fifty years old). Schedule your retirement contributions in a way that brings you the greatest tax advantage.

5. Consider Tax-Preparation Software – Do you prefer to file your own taxes? You may want to consider tax preparation software to see if it can help you avoid potential errors and identify other sources of deductions. Software is available in a wide range of capacities that can match the complexity of your tax situation, and prices are generally reasonable. If you made below $64,000 last year, you can prepare your taxes for free using the Free File tax preparation software available on the IRS website.

6. Seek Professional Assistance – Complex tax situations are best left to the professionals. You may be able to do your own taxes adequately, but a competent tax professional may be able to find you enough refunds to pay for their services and then some — and even if they cannot, you can enjoy greater peace of mind by not having to struggle through the tax forms yourself.

Research a tax professional carefully, and do not just choose one based on advertising (certainly not on promises of the highest refunds). Check their certifications, experience, and online reviews of their services. Note that lawyers and accountants may be qualified to sign tax returns without having any experience in doing so.

What's that smell? It is the sweet smell of successful preparation for tax day. That sure beats dealing with hangovers, or starting your new life in Central America.

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Carla Truett | 02.12.16 @ 21:01
We have a great tax person this year. She had deductions for us that we wouldn't have thought of.
Erin | 02.12.16 @ 21:02
We will be doing our taxes this weekend. I'll make sure to have this list handy so we don't forget anything. Thanks!
Steffanie | 02.12.16 @ 21:02
Thanks for these tips. I am always looking for ways to make sure we get a full refund.
Meredith L | 02.12.16 @ 21:02
I always try to get organized before March. This year though, we had some circumstances that exempt us from the health care penalties but when in doubt it's always a good idea to talk to a professional for the most deductions possible...and start planning for next year!
Irene | 02.12.16 @ 21:05
Great info, every little bit back on taxes helps
Nancy | 02.12.16 @ 21:06
I think the big one for us this year would be to seek professional help.
Selena Walls | 02.12.16 @ 21:08
I went with a professional.
Crystal | 02.12.16 @ 21:11
I've used TaxAct for years and love it. I'm just getting ready to file next week and appreciate these tips.
Kamie | 02.12.16 @ 21:12
I definitely need to explore the deductions part for my taxes, I have not got them done yet, but not all my fault, the mail service is slow this year. Who knows maybe applying the money to my IRA this year may just be the better idea.
Amanda | 02.12.16 @ 21:14
Normally we use online preps, to do our taxes. Last year a actually person and hated it. Will be going back to software this year for sure.
Ron | 02.12.16 @ 21:14
My best advice is save all receipts. No matter how small or insignificant you may something may be for your business or personal consumption, charity donations, etc. Save, save, save receipts! I found out the hard way one year and took a few more to even out.
trish | 02.12.16 @ 21:15
This is where we are right now. Preparing all the paperwork. We have a great tax guy so he makes sure if we have forgotten anything we send it to him. Gets us deductions we didnt know about
Bobbie | 02.12.16 @ 21:16
Gathering up papers today for taxes tomorrow. Hubby finds more refunds doing it the old fashioned way than the on-line sites, and don;t have to pay anyone to do them. Win win all around for us.
Sarah | 02.12.16 @ 21:17
Great list of ways to get the most back. I will keep this handy once I buckle down to do mine.
Jo Ann | 02.12.16 @ 21:21
having tax software is great, You can update your earnings , expenses etc all year long and therefore keep your withholdings in check.
Elaine | 02.12.16 @ 21:23
Still waiting on some of my info to come in. We are usually one of the last tondo them since we normally have to pay. Hoeofully not this year.
Alec | 02.12.16 @ 21:24
We had our paperwork ready in January! We've been exploring the different options we have as far as maximizing our refund but we should be filing soon! Tax season is stressful but we always look forward to it and put the refund towards bills and savings!
Stokes | 02.12.16 @ 21:25
Good tips! I already did #1 and finished my taxes last week.
Christina | 02.12.16 @ 21:33
These are some good tips to get organized, even though I haven't gotten a tax refund in years. I owe, owe, owe :(
gracie | 02.12.16 @ 21:33
I read these list and feel very lucky that I have always had fairly simple and straight forward tax years. I do think it helps to talk to a professional and get the latest changes and updates that affect your circumstances!
Christina | 02.12.16 @ 21:37
We just got ours filed. Thanks for the tips some I didnt know.
Heather | 02.12.16 @ 21:41
We always go to the same accountant every year. We always get all the deductions that we qualify for and he gets us the most we can get back. It's always nice to go to someone who you know has your back.
George Middleton | 02.12.16 @ 21:41
Thanks for the tips. Will keep in mind next year.
$commenter.renderDisplayableName() | 11.21.17 @ 04:39

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