How To Increase Your Tax Refund Now

Posted on: October 27th, 2010 by

Tax Advice - CPA RockvilleFor many Americans, an income tax refund is a windfall.  But the amount of this refund is determined by the numbers that are generated from the previous year.  Therefore, the fourth quarter of the year is the time to start thinking about what can be done to maximize the amount that you can get back when you file your return in the spring.  Here are s few tips to help out as the year draws to a close:

1.) Charitable Donations: Filers who are on the edge of being able to itemize their deductions for the year should consider making a donation of either cash or property to a qualified charity before the year is out.  This can be especially beneficial if the filer has a piece of property of some value that he or she wishes to dispose of, such as an extra car or recreational vehicle.

2.) Retirement Plan Contributions: Those who need to reduce their taxable income for the year should make the maximum allowable contributions to their traditional, deductible retirement plans.  In some cases, such as small business owners and those who make the maximum allowable lump-sum contribution to their plans for the year, this deduction can be fairly large.  Although contributing to Roth accounts may be the best way to go for some, traditional plan contributions afford a current deduction that can make a huge difference in the amount of declarable income for many filers.  Even low-income taxpayers can claim the retirement savers’ credit for small contributions to their IRAs or employer-sponsored qualified plans.

3.) Organization: As basic as this sounds, good record keeping is essential to maximizing your tax deductions.  Make sure that you record every charitable contribution, every above-the-line deduction and anything else that can increase your income tax refund for the year.  Keep copies of all receipts and other documentation that proves your transactions, as the IRS now requires this in order to accept these deductions on every return.

4.) Miscellaneous Deductions: Many taxpayers may be surprised when they discover that certain kinds of expenses or losses can be deducted on their tax returns.  Ask your tax preparer what sorts of losses you can deduct.

5.) Capital Losses: This could be a good time to cut your losses in the market, if you are a short-term investor.  Swap out losing stocks or bonds for similar holdings that offer potential gains and realize the losses on your return.



  1. Tag Cloud
  2. Blog Home