Many Americans would like to increase their refund; luckily it's easy when you know the tax laws. For example, did you know when you move more than 50 miles for your first job your moving expenses are tax deductible? That's right! To be eligible for this, you must move within one year of your first day of work at this new job. For more information regarding moving expenses and how you can deduct them from your taxes, please see Publication 521 on the IRS site.
Choosing your correct filing status can also increase your tax refund, especially for married individuals. Many Americans don't realize the difference between Married Filing Jointly and Married Filing Separately. For most married couples, filing jointly is the best course of action to pay fewer taxes. Also, filing jointly allows you to utilize the Earned Income Credit. where filing separately would not. However, filing separately is best if you are married but legally separated, because filing separately ensures that you are only responsible for the information on your tax return. Filing jointly, both partners would be responsible for all the tax liability on the return. For more information on the differences between
the filing statuses, please see our other articles.
Here's a good one for parents with students in college: did you know that you can deduct Student Loan interest paid up to $2500? You sure can! There are a few requirements to be eligible for this though. If you are a single filer, if you make more than $50,000 a year you may deduct the entire $2500. However if you make between $50,000 and $65,000 this deduction amount is reduced, and if you make over $65,000 you are not eligible for this deduction. If you're married filing jointly, the cap out between $105,000 and $135,000.
You may also deduct expenses made when contributing to charity, including tax mileage and donations. Even contraceptives bought with a prescription are tax deductible! Not to mention commission and closing costs of closing on a property, all of these things are deductible and can absolutely increase your refund!
This article has only named a few ways to increase your tax refund. It's important that you know your rights as a tax payer and keep track of your expenses throughout the tax year to utilize tax credits to the fullest!