Strategies to Maximize Your Tax Return
Tax return time doesn’t have to mean crunch time for you, say the Atlanta tax attorneys at the Law Office of Max Benkel. No matter what your situation, you have a few things you can do to maximize your tax return, so you get a little more money back from Uncle Sam or at least owe the government a bit less.
These strategies might take a little extra time, but they could result in big savings for you and are recommended by Georgia tax attorneys. Try each and see the difference in the amount you owe or get back. Read on to learn a few of the techniques recommended by the Law Office of Max Benkel, tax attorney in Atlanta.
1. Calculate your taxes using different filing statuses. Most people think of this as trying either married filing jointly status or married filing separately status, but you can also use filing status differences if you’re single. If you have a job and a side gig, you must file as a self-employed person if your side gig made a certain amount of money. That means though that if you made under that amount, you get a choice. Figure your taxes both ways and file as the status that gets you a lower tax payment or gets you more money back from the government.
2. Take advantage of your little tax credits, also known as your children. Normally, any individual with an income of $200,000 or less can take the Child Tax Credit of $2,000 for each of their children under the age of 17 years. Due to COVID-19, the American Rescue Plan increases that for the 2021 tax year from $3,000 to $3,600, depending on the age of the child. When you file jointly, you can take the tax credit for up to $400,000 income. You can also deduct up to $6,000 for childcare. That deduction applies to any dependent care, so if you have an elderly parent or adult child who must have a nurse, sitter, or day program, you can deduct up to $6,000 of that cost.
3. Use software or a tax preparer to help you identify tax deductions. If you did open a side gig or start a home business, you can claim a percentage of your home as an office deduction. That means that you also get to claim the same percentage of your utility bills as a deduction. Remember to take your state sales tax deduction and your student loan interest deduction. Consider your charitable donations. If you make a low or moderate-income, you might typically skip this, thinking of it as for those with high incomes, but in-kind donations count just as monetary ones do. An in-kind donation refers to one that provides a charitable organization with a gift of any type. That means that the cookies you bake for your church’s bake sale count, as does the gas you bought to drive the youth group or scouts to camp. Track those small expenses because they add up and each one qualifies as a charitable donation, just as if you gave the organization $20 to $50 each month.
4. Check to see if you qualify for the Earned Income Tax Credit (EITC). If you work for someone else (are not self-employed), you could qualify for the EITC. Originally created for those with low incomes, in recent years the government expanded it to include those of moderate-income levels. Essentially, if you receive W-2s, you should check to see if your income qualifies. The EITC considers whether an individual has children to determine the level of the tax credit. Single people can qualify, too. Individuals with three or more children could claim up to $6,728, depending on their income. The great thing about EITC is that you can get a refund even if you would have typically broken even.
In some cases, despite all of these techniques, you will still owe a little money to Uncle Sam. Practice gratitude because this means you earn so much money that you put yourself in a higher tax bracket. That can mean you are financially healthier than many individuals getting money back in the form of a refund.
If you figure out your taxes and owe more than you can pay at one time, contact Georgia tax attorney Max Benkel. Let his Atlanta tax law office help you negotiate a payment plan with the Internal Revenue Service (IRS). When interviewing tax return attorneys in Atlanta, start with the office of Max Benkel.
