Sunday, April 8, 2012

3 Tips To Help Maximize Your Tax Return

Just about everyone is interested in maximising his or her tax return whenever possible. After all, money is not any easier to come by these days than it has been in the past, and nearly everyone could use a break around tax time. However, there are a lot of simple tips and tricks that not everyone knows about, which means you might potentially be paying far more than you have to to the government each year. This article will provide you with 3 tips to help you get as much money as you legally can from your tax returns this year.
Use Tax Preparation Software
This is perhaps the most useful tip anyone can have when it comes to getting the most back from his or her tax return. The fact of the matter is that the tax code is complicated and few of us are attorneys, accountants, or mathematicians. This makes it quite difficult for most people to reliably calculate every part of their tax return correctly, which is what you need to do if you hope to get as much money back as possible. A simple error in arithmetic, such as miscounting your income or transferring the wrong numbers into the right box can have you paying hundreds or even thousands more than you had to, and that's no fun.
Beyond potential errors of arithmetic, when you use tax preparation software, you can find out about a lot of potential ways to save money that you might not necessarily have thought of or known about on your own. For example, in many cases, you might be able to deduct the interest on your mortgage when you get to tax time. Similarly, if you've been looking for a job all year, you might be eligible for some deductions there. The point is that rather than spending lots of time trying to become a tax expert in short order, you might as well just consult an up to date software package that will look for the potential deductions for you and make sure your additions, subtractions, multiplications, and divisions are right.
Remember Your Charitable Donations
This is another quick way to get more money back when tax time rolls around. Many of us are givers, which is great, but we forget that we can actually apply our generosity toward our tax returns when it's time to figure out the numbers. Keep track of the donations you give to charity each year, and when it's tax time, you'll be able to write them off and know that you helped people without hurting your bank account. However, it's particularly important to have any receipts and statements handy, as people sometimes try to claim they gave money away when they didn't, and if you don't have proof, you might be in trouble if you're subject to an audit.
Look for Education Deductions
This tip won't apply to everyone, but if you, your partner, or your children are in school, look for potential deductions in your educational costs, such as interest from student loans. School is expensive enough; do what you can to get some of your money back.
Glen is an accountant who runs his own small accounting business. Glen had worked for some of the biggest accounting firms in Australia before deciding to work for himself. He is one of the most highly respected accountants Sydney residents can utilise to take care of their returns.