Yay, tax season! You’ve probably never heard those phrases uttered together, as the majority of people dread this time of year. Even those who have an inkling that they’re going to get a big refund aren’t crazy about it, as filing taxes is another item on their overly busy to-do lists. Here’s the thing, though. It doesn’t have to be horrible, especially if you hire a tax professional. Not only will this lighten your load but this person will most likely be able to get you more of a refund than you would on your own. Read on to discover the ways a tax pro can maximise your refund.
They Will Know the Ins and Outs of Deductions
Properly taking deductions is a rare art that most of us know nothing about, but all of us could benefit from when done right. And the truth is that, whether it’s out of laziness or simply lack of knowledge, many of us assume that the standard deduction is right. A tax pro will be well informed about Schedule A and IRS Publication 529, which cover miscellaneous deductions extensively. And as this MoneyTips.com article points out, “Do not forget about ‘above-the-line’ deductions like educator expenses and health savings account (HSA) deductions. You can take those whether you itemize or not.” This is something a tax pro would be able to point out to you, and the difference in what you’ll get back could be significant.
An example given from this Mashable article is that you may be able to deduct up to $4,000 for tuition-related expenses. And if you’re unemployed, you might be able to deduct certain expenses related to your job hunt. Other examples were deductions involving healthcare costs, upgrades to energy efficiency in your home, business travel, new jobs, and more. Your tax pro would be able to get you the most tax refund simply by understanding these deductions.
They’ll Know the Tax Laws
The highly nuanced tax laws are another reason to hire a tax professional. Not only are tax laws complicated, but they also change quite often. Your tax pro stays abreast of these changes and will use those to get you the most money back on your refund. The reason for this is that what’s allowed for deductions and credits are often the biggest part of what changes, so your tax pro will act in accordance with the new laws. This is particularly true if your taxes are complicated to begin with. Perhaps you just started a new business and don’t know how the taxes work in this regard. The hundreds you pay your tax professional could yield you thousands in refunds.
They’ll Prepare You for Future Tax Seasons
Once you find a tax relief solution you like, you’ll likely use this person or firm in the future. This means that you will learn a lot from them when all is said and done. Your tax pro will likely know a lot about your business (if you chose right!) and will, therefore, be able to guide you in what to save and what you can throw away as far as receipts, etc., go for the next year. Once you get a rhythm down with this person or firm, taxes will likely get easier and easier each year.
They’ll Help You with Your Donations
If you donate to charities throughout the year, you might forget or think it’s unimportant when it comes to tax time. The thing to remember is that these philanthropic donations can add up, and your tax professional will be able to use his or her knowledge of IRS Pub 526 to help you figure out what can and can’t be deducted. There’s no shame in getting something back for the charitable donation you gave in the first place.
They Will Consider Your Retirement Contributions
Retirement contributions can be quite confusing because not many people know that the tax-filing deadline isn’t until April, and you can credit those to last year’s taxes. Your tax professional can help you schedule your retirement contributions so that you get the best tax advantage.
What you pay your tax pro will most likely be small peanuts in comparison to the ways in which they maximise your refund so, when in doubt, just call one.
*This is a collaborative post