The one thing most people look forward to during tax season is receiving a hefty refund. Some individuals even choose to have a higher amount withheld from their paychecks each month just so that they can get it back in April.
But most people don’t realize there are other ways to get extra money back on your refund — and that it’s all in which documents you hold onto. We’ve listed our best tips out for you here.
Record of Income
Early in the year you should receive a W2 form from every business at which you were employed in the past year. A W2 form states the total amount you were paid, as well as the amount of income tax withheld for the year. If you worked as an independent contractor, you’ll need a Form 1099-MISC stating the amount earned for each client. Businesses are not required to send you a Form 1099-MISC unless you earned more than $600 from them, so this may be something you’ll need to follow up with them about.
W2 forms and Forms 10-99-MISC are just the basics. Certain expenses and payments you made throughout the year may qualify you for a decrease in the amount of your income that is taxed, thus increasing your refund. Documents you’ll need include:
- 1098-T: If you paid tuition and fees paid to a college or university.
- 1098-E: If you made student loan interest payments. A student loan statement may also suffice.
- Are a teacher and pay for classroom supplies (Receipts)
- Made energy-efficient home improvements, like solar panels. (Receipts)
- Are self-employed and contribute to a medical savings account. (Receipts)
- Are self-employed and made health insurance payments. (Receipts)
- Had moving expenses. (Receipts)
- Made alimony payments. (Receipts)
Deductions and tax credits
Another way to lower the amount of tax owed is to itemize deductions and tax credits. These payments and expenses will not be taxed, which in turn increases your refund. You’ll need the following records:
- Receipts: If you made charitable donations. This can include cash donations, driving costs for volunteer work, or even the value of property donated in those curbside pickups.
- Child care costs: You’ll need a bit more than just receipts for this one. Include the provider’s tax ID, as well as name, address, and amount paid.
- Bills: If you had medical or dental expenses in the past year.
- Adoption: So many expenses go into adopting a child. For tax purposes, you’ll need records of medical expenses, transportation costs, legal services, and the child’s social security number.
- Receipts: If you kept a home office and had expenses related to its upkeep.
If you filed an extension on your taxes, you’ll also need a record of how much you paid at that time.
For more help getting the most out of your refund, give Hacker Accounting a call at 602-375-5251. We have been filing personal tax returns for our valued clients for over 15 years, and will do everything in our power to get you the biggest refund possible.