WEST PALM BEACH, Fla. - From changes in the way you can file certain deductions to things you could be missing every year, these five tips will help you get the most out of your tax return.
"All of this can make differences of thousands on your tax return and over a period of years, those thousands can turn out to be hundreds of thousands of dollars in your pocket,” said former IRS agent Sandy Botkin.
Tip #1: Max out IRA contributions all the way up to April, not just January to January.
The more you contribute the less of your income is subject to taxes, the greater the refund.
Tip #2. If you work out of your home, absolutely file for a home office deduction. The paperwork is simpler this year.
Botkin said, "There used to be a trap where if you claimed a home office in gains, for example if you used 10% of your home for an office, 10% of the sale price would be taxable. That's not true anymore."
Tip #3. If you're making charitable donations of $250 or more, get your receipts from the organizations before you file.
Not having receipts could cost you in the long run if you're audited.
Tip #4 If you made $50,270 dollars or less, file for the Earned Income Tax Credit.
The credit will reduce the federal taxes you owe, meaning more money in your pocket.
Tip #5 File by the April 15th deadline, even if you can't pay the full bill.
"You do not get an extension to pay the tax, you must pay what you owe with the extension or you're going to owe substantial penalties,” said Botkin.
The failure to file penalty is much higher than the penalties for not paying on time.
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