Five Tips To Help You Get The Most Out Of Your Tax Returns
During tax season, many taxpayers are busy gathering the right documents to make sure they do not face charges from the IRS. While that is crucial, filing tax returns is also an excellent opportunity to boost one’s tax refunds and reduce any liabilities. However, such a role often requires planning, knowledge of tax laws, and expert assistance.
As tax accountants in Baltimore, MD, Edrien Inc. have been assisting clients since 1998. To ensure you are better prepared and can capitalize on your tax returns, we have put together five tips to help you get the most out of your tax return.
Tip #1: Set up a Health Savings Account.
Start planning for your future by opening and using a Health Savings Account (HAS). This is tax adjustment to your taxable income which can lower your taxable income and provide you with a blanket for Medicare tax in the near future.
Tip #2: Pay estimated advance payment from your state.
Your state is your main residence, so any advance payment you make to them will also be used as part of itemized items under Schedule A.
Tip #3: Claim zero tax exemptions.
If you are planning a vacation, it would be wise to claim zero on your tax exemptions. It reinforces you to save your money, and upon filing your tax return, it would be nice to have a larger tax return refund to be used for your vacation trip and/or return from flat broker vacation; at least you have time to rest upon return without struggling to find funds.
Tip #4: Maximize your retirement plans such as 401K or 403b.
It reduces your income taxable, and it also helps you with future budgeting and planning such as buying your home or paying for your child’s education college fund. You are also entitled to use this money for any unforeseen medical condition which is considered as a hardship. There is also no ten percent penalty from withdrawing from your 401K retirement plan even though you are not fifty-nine-and-a half years to withdrawal allowable.
Tip #5: Work part-time to minimize tax liability.
For retired taxpayers who are bored with their retirement lifestyle, know that any additional income besides retirement Social Security will be taxable (10% - 80%). To minimize such tax, work only part-time if you can help it. Find an employer who is also willing to provide health insurance by working part-time to minimize your Medicare tax.
By following these tips, you can take advantage of any tax deductions, maximize your credit refund and secure your future. If you’re looking for tax accountants in Baltimore, MD, who can help you, reach out to Edrien Inc. We offer accounting, bookkeeping, tax preparation, personal and corporate tax returns, tax planning, public notary, and immigration consultation services. We also have experience in providing tax revenue filing, extensions, amendments, audit, and small business tax services. Click here to get in touch with our accountants.