What to Do to Make the Most of Your Tax Refund
Death and taxes are the only surety to human beings. However, when some people think about or hear about taxes, it may bring a little fear in their minds. So many Americans dread the idea of tax time, and don’t look forward to doing their taxes, even if they will be owed a tax refund. Yes, people look forward to getting a refund, but not at the expense of having to file an intricate and complex tax return. If you find it easy and simple to do your taxes each year, ask the business person and they will tell you that this is not something that they look forward to. In many cases, the business person may owe the IRS money instead of the other way around.
If you are due a tax refund, be sure to use it wisely and don’t spend it frivolously. That means, if your vehicle is having mechanical issues, it may be time to purchase a new car and trade in the one you currently are driving. You can also put your refund in a savings account or investment fund (better option) until you are sure what you want to do with it. It would be ideal, though, to consult a tax professional or financial advisor for wise recommendations.
While, you may like to do your own taxes, it is really better to solicit the services of a professional tax person. They have the innovative software programs to make it easier and to get you the most deductions that you are entitled to. If you are single and are not a homeowner, then you can probably do your own taxes. There are online software program that you can use for free. Turbotax.com is one of them. The tax professional, however, has received training and knows the new IRS laws more than you do. You can get more out of your taxes by itemizing your deductions instead of using the standard deductions. The tax preparer will ask you pertinent questions to figure out which deductions you are eligible for. It is worth it to hire a professional to do your taxes, even though you have to pay for the service.Please note: Solicit the services of a tax preparer that has gone through the review and vetting process. If you are not certain, get some referrals.
If you are not a business owner, nine times out of ten, you completed a W-4 with your employer. Bet you did not know that these forms have to undergo a review every year? As their lives go through changes, most employees don’t revise their withholding status each year. It is important to update this information if you were married during the year, had a child or changed employment because these factors can greatly impact your exemptions.
There are important things that you should keep track of – to use on your itemized refund. Some of these include charitable contributions, cost for job search, relocation expense, education cost, child support, medical expenses, specific debt and other variables.