Getting some of your money back is not such a bad idea. Though this can be done the right way, there are numerous illegal ways of increasing the tax refund that can get you into trouble. Often time you know about this, other times you do not but whatever the case may be, you are always going to spend money correcting the details or at worst pay a penalty or get a court date. For this reason, today we will be taking a look at how you can legally increase the money you would be getting back.
The longer you take to file your taxes, the higher the fees and penalties you will have to pay, and the less likely you are to qualify for a refund or additional tax credits for which you could have qualified in a different situation. So, fill your tax early! Make sure you don’t miss the deadline as this is costly and easily avoidable,
Planning to fill in tax returns for 2020? For online submissions, you have until 31 January 2022 to send in your 2020-21 return. But if you want to file on paper, you’ll need to submit it by 31 October 2021. Missing the deadline will lead to an automatic £100 fine, even if you don’t owe any tax.
Apart from filing your tax return early, which other method can you use to save some money?
Claim tax deductions
State sales tax, reinvested dividends, out-of-pocket charitable contributions, student loan interest, and Child and dependent care are some of the deductions one could take advantage of. You should probably check on all the ones you are eligible for and enroll on them. Let us take the child and dependent care for example. Being on this plan would mean that you get to keep a maximum of $8000 from tax if you have one individual eligible for the child and dependent care and $16000 if you have two or more eligible individuals.
Tax-deductible expenses
If you are self-employed, you can pay a little lesser tax by taking of expenses you had been faced with while running your business. Doing this will reduce your profit and overall income. One must careful when picking business expenses as you can easily get into a big problem if you are wrong and mistaken take personal expenses as business expenses.
These two make the list of the most effective ways of increasing your tax refund. When trying to increase your tax refund, aim for two things,
taxable income reduction, and tax credits. We recommend getting the help of a professional. While doing this, remember that you are responsible for what you fill in as your tax returns and not the one preparing them (if it is a third party)
