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Taxing Situations: Ways to Keep More of your Money for Yourself

Taxing Situations: Ways to Keep More of your Money for Yourself Posted on March 1, 2018Leave a comment

With tax season well under way we receive a lot of questions about doing income taxes. Should you do them yourself with a program like Turbo Tax? Should you go to a long term professional or someone like H&R Block who sometimes hires temporary workers?

Of course, we aren’t questioning temporary tax workers. Tax agents have to have the same certification regardless if they work full time or only during “income tax season”. Those at H&R Block and other companies like them are more than capable of taking care of you (disclaimer: please don’t sue us).

So where will you find the greatest returns on your income taxes? How do you keep more for yourself? All this and more, today.

Itemizing Failures

One of the biggest costs for income tax returns are not itemizing your costs. If you are a 9 to 5 worker who gets a W2, there’s not much reason to do this unless your costs out of pocket are more than your minimum deductible to begin with. If that’s happening, you should probably talk to your HR department.

If you’re self-employed, you need to itemize. Self-employment taxes are higher than ever and every single penny you can take off is a penny earned. Keep all of your receipts and 1099 tax documentation for up to 7 years after the tax year. Audits do happen and that evidence can silence the IRS very, very quickly.

If your itemized receipts do not add up to more than your typical minimum deductible, go ahead and take the minimum deductible. However, in self-employed business, it is almost a given that you will spend more than your minimum deductible.

Giving More to Get More

Charitable donations not only make you feel good and help those around you, but they can help you make up those few extra bucks to top your minimum deductible. Always donate to 501c3 organizations and other non-taxed organizations to help you make ends meet at the end of your tax year.

If you own a larger business, this is an ideal opportunity to help make your business taxes look a bit better on paper. Offer donation matching incentives to your employees for organizations that they value, or for ones looking for a little extra help during natural disasters or extreme times of need. Not only is this great publicity, it’s also a great way to help.

You vs a Tax Agent

So when it comes down to it, what’s better? Doing your own taxes, or having someone go over them with you? It really depends on how comfortable you are with mathematics.

If you aren’t a fan of dealing with lots of numbers in lots of different places, it may be time to call in the pros. Almost all pros have their own preferred tax software that allows them to simply plug in the numbers and get an automatic refund number for you.

However, some of us really enjoy math. If you’re one of us, it may be worth your while to go ahead and see what numbers you get versus what a professional gets. File whichever one is higher, so long as your result isn’t astronomically higher than the professional’s.

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