The tax season is over and some people are preparing for vacation thanks to their huge refund, while others are looking for every extra penny to pay the money they owe. If you find yourself owing money, have no fear, we are here to help.
Preparing tax returns can be quite a daunting task. You could potentially make costly mistakes that result in a larger tax bill or smaller refund. These mistakes are avoidable with careful planning and attention to minor details. Here are some tips for taxpayers that can keep you from owing money next year:
Make Estimated Tax Payments
As a self-employed person, you have a responsibility to set aside a portion of your earnings to account for tax. As an employee, you can also refigure your paycheck to increase withholding and create a new Form W-4. An online paycheck or withholding calculator can be used to calculate potential tax liability. It may be difficult to set money aside initially, but it will save you from an unexpected bill come tax time.
Check Your Filing Status
Take a look at the different status options for taxpayers, and file under the status you are eligible for. This can significantly affect tax liability and refunds. A single parent’s tax bill can be reduced significantly by claiming dependents if he or she files as head of household. On the other hand, claiming head of household incorrectly will distort your tax, and you may owe money back.
Time Your Payments
You could increase your deduction itemizing potential and get a larger refund if you made some payments at certain times of the year. For instance, you can make early payment for January mortgage before the end of December, to increase interest deduction.
Keeping a tab of your activities can help track all expenses that are eligible to be listed as deductions. You don’t want any forgotten expenses stopping you from buying something you need later on.
Get a Professional Tax Preparer
It might just be time to get a qualified professional tax preparer or accountant to complete your tax returns form. Adjustments will be made to help you get maximum benefit from the process in form of a lower tax bill or larger refund. Contact Nationwide Tax Solutions for your free tax consultation today!