Thursday, May 19, 2022

How To Get More Money Back On Taxes

Don't Miss

Advance Child Tax Credit Payments

How to get more money back on your taxes

The American Rescue Plan, signed by President Joe Biden in March, boosted the 2021 child tax credit to $3,000 from $2,000 per child age 17 and under, with an extra $600 for children under age 6.

Millions of families received half up front, through $250 or $300 monthly payments, from July through December, meaning they will have a smaller write-off at tax time.

“Working families are not expecting this,” said Tommy Lucus, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. “And it’s going to be a shock to them.”

For example, if you qualified for a $3,000 tax credit and received payments for $1,500 in advance, you will claim the $1,500 balance when filing a tax return.

You Will Receive Your Refund In The Time Between July And December

There is no longer a single refund date for all taxpayers. Most individual taxpayers get their tax refund in August or September. The last payments of refunds will be made in December.

The date when your tax assessment process ends. It ends at different times for different people. The end date valid for you is stated in your tax decision and in MyTax.

Table: How the end month of tax assessment affects the tax refund date.

End month of tax assessmentDate when refund is paid to bank account
May
5 December 2022

Maximize Your Ira And Hsa Contributions

You have until the filing deadline to open or contribute to a traditional IRA for the previous tax year. That gives you the flexibility of claiming the credit on your return, filing early and using your refund to open the account.

  • Traditional IRA contributions can reduce your taxable income. You can take advantage of the maximum contribution and, if you’re at least 50 years old, the catch-up provision can add to your IRA.
  • Although contributions to a Roth IRA don’t give you a deduction, they still qualify for the valuable Saver’s Credit if you meet income guidelines.
  • If you’re self-employed, you have until October 15 to contribute to a certain self-employed retirement plans, provided that you timely file an extension. If you don’t file for an extension, the regular filing deadline for that year is the deadline for most contributions.

Pre-tax contributions to a Health Savings Account can also reduce your taxable income. You can make these up until the filing deadline as well. Certain requirements must be met in order to open and contribute to an HSA:

  • You must be enrolled in a health insurance plan that has high deductibles that meet or exceed the IRSs required amounts.
  • That plan must also impose the maximum annual out-of-pocket cost ceilings that meet the IRSs limitations.

You wont be able to participate in an HSA if any of the following are true:

Read this article to learn more about HSA requirements and how these accounts work.

Don’t Miss: Doordash 1099 Example

Youre Our First Priorityevery Time

We believe everyone should be able to make financial decisions with confidence. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.Here is a list of our partners.

Include The Child And Dependent Care Credit

How to Get More of Your Money Back: Overlooked Tax ...

The Child and Dependent Care Credit is based on a percentage of the amount you paid for the care of a qualifying child or dependent.

For tax year 2020,the total expenses you can claim are capped at $3,000 for one eligible individual and $6,000 for two or more. If your employer offers dependent care benefits, you are required to deduct this amount.

For 2021, the American Rescue Plan brings significant changes to the amount and way that the child and dependent care tax credit can be claimed. The plan increases the amount of expense eligible for the credit, relaxes the credit reduction due to income levels, and also makes it fully refundable. This means that, unlike in other years, you can still get the credit even if you dont owe taxes.

  • The amount of qualifying expenses increases from $3,000 to $8,000 for one qualifying person and from $6,000 to $16,000 for two or more qualifying individuals
  • The percentage of qualifying expenses eligible for the credit increases from 35% to 50%
  • The beginning of the reduction of the credit is increased from $15,000 to $125,000 of adjusted gross income .

Also for tax year 2021, the maximum amount that can be contributed to a dependent care flexible spending account and the amount of tax-free employer-provided dependent care benefits is increased from $5,000 to $10,500.

A qualifying individual is:

To claim the credit, other criteria must be met.

Read Also: How Do You Report Plasma Donations On Taxes

Want To Lower Your Tax Bill Then Don’t Miss These Frequently Overlooked Tax Breaks

You need to claim all the tax breaks you’re entitled to if you really want to cut your tax bill to the bone. Unfortunately, though, people often overlook great tax-saving opportunities because they simply don’t know about them. The tax laws are changing all the time, which makes it even harder to keep up on the latest tax deductions, credits and exemptions. And you’re completely out of luck if you don’t discover the write-offs you qualify for before the applicable amended return deadline has passed.

Don’t let that happen to you! Check out our list of 20 frequently missed tax breaks. You may uncover a hidden gem that turns your 2021 tax return into a money-saving masterpiece.

See If You Qualify For Free Tax Filing

You can receive free tax preparation assistance at a Volunteer Income Tax Assistance location, if you meet any of the following criteria:

  • You have an income of $56,000 or less
  • You are 60 years old or older
  • You have a disability
  • You speak limited English

If your income is $69,000 or less, you can use most major tax preparation software to file your taxes for free through the IRS Free File Alliance.

Members of the U.S. Armed Forces and their families can use the free online tax prep and e-filing program MilTax.

Also Check: How Does Doordash Do Taxes

Can I Claim The Eitc Child Tax Credit And Child And Dependent Care Tax Credit

Provided you meet the qualifications for these tax credits, you can claim all three to the extent that you meet the requirements. Even if you don’t owe taxes for 2021, you should nevertheless file a tax return if you qualify for any of these tax credits because all three are refundableany credit amount that exceeds your tax liability is paid to you if claimed on your tax return.

Deduction Of Medicare Premiums For The Self

How To Get More Money Back On Your Taxes-Lots of Money!

Folks who continue to run their own businesses after qualifying for Medicare can deduct the premiums they pay for Medicare Part B and Part D, plus the cost of supplemental Medicare policies or the cost of a Medicare Advantage plan.

This deduction is available whether or not you itemize and is not subject to the 7.5% of AGI test that applies to itemized medical expenses. One caveat: You can’t claim this deduction for premiums paid for any month that you were eligible to be covered under an employer-subsidized health plan offered by either your employer or your spouse’s employer .

Also Check: 1099 For Doordash

Tax Refund Calculator: How Much Will John Get Back In Taxes

John is a single 30-year-old with no dependents. Last year, he made $75,000, withheld $15,000, and collected no government benefits.

Check out how much he could get for his 2017 tax refunds .

Subtract the red circle from the blue for the refund.

$3,105. Just about the average for tax refunds! AND with the new tax laws, he stands to get even more in his refunds in 2019 .

How about someone whos married with children?

Bonus:

The Fast Way To Get Your Tax Refund

There are a number of ways to get money early. Filing as early as possible will give you a better chance of being in the first round of returns processed by the IRS. Electronic or e-filing gets your return to the IRS quicker than mailing a paper return. The sooner they receive your return, the sooner they can begin processing. Choosing to have your refund directly deposited into your bank account instead of receiving a check in the mail is also faster.

Another way to get your refund early is to choose to load it onto a Serve® American Express® Card. Your refund will be available up to two days faster* than standard direct deposit. Those two days can mean the difference between getting your refund on a Friday or waiting until Tuesday of the following week. It makes a big difference for most of our hard-working clients.

Read Also: Doordash Pay Taxes

Protect Yourself From Tax Fraud

Scammers like to take advantage of tax time to go after unsuspecting Americans. Follow these tips to protect yourself from tax fraud.

Be aware of scam phone calls.

The IRS will never:

  • Demand immediate payment without first sending you a bill in the mail and giving you an opportunity to question or appeal the amount they say you owe.
  • Require you use a specific payment method for taxes, like a prepaid debit card.
  • Ask for credit card information over the phone.
  • Threaten to have you arrested for not paying.

If any of these things happen to you, report it to the Treasury Inspector General for Tax Administration at 1.800.366.4484 or at treasury.gov/tigta.

File electronically and request that your refund be deposited directly into your account.

Use ID theft prevention measures. Dont carry your social security card with you and dont give it out just because a business or professional asks for it. Also, dont carry your Medicare card unless youre going to a doctor for the first time.

Check your credit report. You can review your credit report for free every 12 months at AnnualCreditReport.com, or by calling 877-322-8228.

If you suspect youve been a victim of identity theft and it involves your income tax return, the IRS has more information and help on suspected fraud.

Dont Count On That Tax Refund Yet Why It May Be Smaller This Year

8 Tips to Get More Money Back on Your Tax Refund, As Told ...
  • If youre banking on a tax refund, it may be smaller, or you may owe money this season, according to financial experts.
  • The advance child tax credit, paused student loan payments and year-end mutual fund payouts may cause higher taxable income for 2021.

If you’re banking on a tax refund, it may be smaller, or you may owe money this season, according to financial experts.

Typically, you get a federal tax refund when you’ve paid or withheld more than the amount you owe, based on taxable income.

The IRS subtracts the greater of the standard or itemized deductions from adjusted gross income to reach taxable income, and there are a few reasons why it may be higher in 2021.

Also Check: Federal Irs Tax Return

Review Personal Bank And Credit Card Statements

Although you should never mix business and personal finances, you may have used your personal bank account or credit card to make a business-related purchase throughout the year. Review your personal bank and credit card statements for business expenses you may have otherwise missed. Your business accountant should know how to record these expenses in your books so that they can be reflected on your tax return as a business expense.

Getting The Most Out Of Your Tax Deduction

Not every business can get a tax refund. However, small-business owners who dont qualify for a business tax refund could still see money back on their individual tax returns. There are also steps you can take to increase the amount of money you get back on your return, such as prepaying expenses and keeping track of tax credits you are eligible for. As with all things tax-related, to get the most bang for your buck, it helps to work with a qualified tax preparer, such as a CPA or enrolled agent.

Don’t Miss: Plasma Donation Income

Early Refund Advance Loan*& The Holiday Shopping Season

For qualifying customers, there are loans available based on their estimated federal income tax refund. Those loans can make a huge difference if you need money for holiday shopping and other expenses in mid-December. You may consider applying for an Early Refund Advance, a no fee, 0% APR loan from MetaBank®, N.A. available to qualifying clients who prepare their taxes with Jackson Hewitt. For 2020 tax filers, Early Refund Advance loan amounts are between $200-$700.

No W-2, no problem. Just present your paystub or other acceptable income verification to apply for Early Refund Advance*. In January, provide your W-2 or other tax documents to complete filing your taxes and apply for additional Refund Advance loan amounts. See if you prequalify online before meeting with a Tax Pro. Loan available within 24 hours if disbursed on a prepaid card or in 1-5 business days with direct deposit. Terms and conditions apply.

Rrsp Contributions Lower Your Taxable Income

Get MORE Money back!! | Filing taxes in 2021| Tax Changes and Coronavirus Affect on Taxes

Lets say you earned $60,000 in 2020 and contributed $2,000 to a Registered Retirement Savings Plan. If you record and claim those RRSP contributions on your taxes this year, your taxable income will be $60,000 $2,000 = $58,000.

Because you paid income taxes on an income of $60,000 but now your actual income is $58,000, the government will give you an income tax refund for the taxes paid on that $2,000. If you live in Ontario, this will result in an income tax refund of approximately $584!

A $584 refund on a $2,000 RRSP contribution represents a 29% instant return on your investment.

Also Check: Doordash Self Employment Tax

Will Your Refund Be Delayed

In the end, how quickly you receive your tax refund depends on when you file your taxes, how you choose to file, and what credits and deductions you might claim. While refunds including EITC and ACTC will be funded no earlier than February 15, you will still benefit by filing early. You are giving the IRS plenty of time to review your return, verify your EITC and ACTC eligibility, and W-2 authenticity, which is required before your return is processed. Additionally, filing with a tax professional who e-files will also save you time.

The Rrsp Is Better At Lowering Your Taxes If You Have A High Income

Because the RRSP favors higher incomes, it makes the most sense to choose the Tax-Free Savings Account over the RRSP until your gross income is greater than $50,000.

If you have children you claim as dependents or have other tax-deductible expenses, you may even want to wait until your income is greater than $70,000 to begin contributing to an RRSP.

Recommended Reading: Do You Have To Pay Tax On Doordash

How Much Can You Deduct

The amount of money that you can deduct on your taxes may not be equal to the total amount of your donations.

Note: Limits on cash and non-cash charitable donations have increased or been suspended. Learn more about charitable deductions in 2020.

Tip : Check Your Filing Status

How to Get More Money Back From Your Tax Return

If you use an accountant at tax time, make sure you tell them if you get married, get divorced or experience any other life changes. The relationship youre inor noton December 31st determines your filing status for the whole of 2020. Filing statuses include:

  • Single

You can only file using the head of household status for 2020 if you:

Featured Topics

  • Are unmarried on December 31st
  • Paid more than 50% of the costs of maintaining your home in 2020, AND
  • Have one or more dependents living with you for at least six full months in 2020

Head of household usually gives you a tax advantage, so if you can, go for HOH over single filing status.

Don’t Miss: Www..1040paytax.com

What To Know About The Child Tax Credit For 2022

The expanded Child Tax Credit expired at the end of 2021, so as of now families will not receive any advance monthly Child Tax Credit payments in 2022. That means youll no longer get the extra cash in your account on the 15th of every month. If you used those payments for child care or other expenses, it can make sense to start planning how youll budget without them.

Even without an extension of the new changes in 2021, parents eligible in 2022 can still receive the original Child Tax Credit when they file in 2023.

That means for 2022, the amount of the credit will revert back to $2,000 per eligible child under age 17. But without the expanded credit, the Child Tax Credit may again not be fully refundable and require parents to meet a minimum earned income threshold to qualify.

More articles

Popular Articles