Laying the groundwork for a tax refund requires some simple tax planning, a little research and some forethought. Reviewing your tax status, consulting your tax professional when filling out your W-4s and taking advantage of several tax credits can help you increase your tax refund. Newport Beach Tax and Financial can help decide which credits can get you the biggest refund. When you start a job, your employer asks you to complete form W-4. This tells your employer how much federal income tax to withhold from your paycheck. The more allowances you claim on the form, the less income tax will be held back. This will give you bigger paychecks, but a smaller tax refund (or potentially no tax refund or a tax bill at the end of the year). Claiming fewer allowances on your W-4 will mean smaller paychecks, since more tax will be withheld. This increases your chances of over-withholding, which leads to a bigger tax refund. That’s why it’s called a “refund:” you are just getting money back that you overpaid to the IRS during the year.
Taxpayers who watch the calendar improve their chances of getting a larger refund. If you can, pay January’s mortgage payment before December 31st and get the added interest for your mortgage interest deduction.
Schedule health-related treatments and exams in the last quarter of the year to boost your medical expense deduction potential.
Paying property taxes by New Year’s Eve could make the difference between itemizing and taking the standard deduction, and thus, a bigger refund. If you’re self-employed, you can pay your fourth-quarter state estimated taxes in December, rather than in January when they’re normally due, to increase your itemizing potential