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Maximize Your Tax Refund!

Maximize your tax refund!Will you get a refund or will you owe?  Tax time can be frightening if you are on your own!

However, if you prepare ahead of time and are willing to do a little research, you may find out that your refund is larger than you thought.

To maximize the refund you get (or minimize the balance you owe on April 15th), it is important that you take every deduction you deserve!

Each year many people who are eligible to itemize their deductions cheat themselves out of a bigger refund by claiming the standard deduction.

Don’t let this happen to you!  The tax laws change every year and you may be leaving money on the table.

Maximize Your Refund – Take Your Time!

Many people are in a big rush to file their taxes, which leads to them making mistakes.  Your best best is to gather all of your tax documents and take your time.

This is also a great time to spend a few minutes organizing your documents and receipts so that if you’re ever audited, you’ll have everything you need in one place!

When you e-file your return, you will still get your refund in a week or two, even if you file in March or April!

Once you’ve got all of your W-2s and other documents gathered, sit down with Form 1040, Schedule A and list all the deductions that you are entitled to take.

The IRS provides detailed instructions to help you.  Read through the instructions thoroughly and write down your deductions as you go.

The best way to maximize your refund is to do a little research on itemized deductions that are allowed but not often taken.  Do not assume that you won’t be able to itemize until you have carefully reviewed everything available, such as:

Charitable Contributions

These can include anything you have donated to a qualifying organization such as clothing, furniture and other personal belongings or a cash donation you made to your favorite charity.  

Did you know that contributions to your church, out of pocket expenses for events that you volunteered for, and mileage to and from events are also deductible?

You’ll need receipts, canceled checks and/or an acknowledgement from the charity in order to claim these, depending on the type and amount of the donation.  Non-cash donations totaling over $500 require an additional form – Form 8283.

Out of Pocket Medical Expenses

If you have paid out a lot in medical expenses you may be able to get a portion of those refunded to you.  First, you’ll need to know your Adjusted Gross Income from the bottom of page 1 of the 1040.  If you paid out over 7.5% of that amount in medical expenses, then you can itemize your medical expenses.

All out of pocket medical expenses qualify, even health insurance (not paid by your employer and not paid pre-tax) and Medicare Part B and D premiums.  Do not forget about prescriptions as they can really add up!

Mileage to and from doctor appointments and hospital visits also qualify.

Here’s a link to a list of medical deductions on the IRS website.

Taxes and Mortgage Interest

These are still allowable and can really help to increase your refund!  For states with personal property tax (like Missouri), you can deduct any that are based on the item’s value (but not weight).

It doesn’t matter which year the taxes are for – it only matters when you actually paid them.

Often overlooked is the deduction for interest paid on camper trailers or boats.  Under certain circumstances, these can qualify as “second homes”.

State and local income taxes paid should also be included.

To maximize your refund, you may consider “stacking” your deductions, meaning that you’d pay two years’ worth at the same time, or paying bills normally due in the first few months of the year in December.

Miscellaneous Deductions

The following can be deducted to the extent that they exceed 2% of your Adjusted Gross Income:

Unreimbursed Employee Expenses

If you travel for work and are not reimbursed (or are only partially reimbursed) for your expenses you can claim these on your return.  These can include things such as hotel, food, tolls and gas expenses.

Don’t have receipts?  You may still be able to claim a per diem amount for meals and lodging based on the location.

If you’re required to drive your own car for work, don’t forget business mileage as this can be a HUGE deduction!

Commuting to a regular place of business (such as your office) does not count.

You must have good records, including a mileage log that includes the date, miles and business purpose.  In the event that you are audited, you can count on the auditor asking to see your mileage log!

Cell phones do not usually count, even if you’re required to be on-call for work, unless you have a letter from your employer stating that it’s required for the convenience of the employer.

Clothing Expense

If your job requires you to wear uniforms, steel-toed boots or safety glasses and you purchase these on your own, you are able to claim the cost involved.  Even if your employer pays for your uniforms, if you have them dry cleaned you can deduct that expense.  You can also deduct costs for alterations, police duty belts, etc.

Blue jeans, painter’s whites, dress shirts & ties or other clothing items that you can wear during off-duty hours do not count!

Job Search Expenses

Even if you did not receive the jobs you went on an interview for, most fees associated with the search can be deducted.

Other Miscellaneous Deductions

You can also deduct the fees you paid to have your taxes prepared, safe deposit box fees, union dues, other professional association dues, and certain investment fees.

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