When preparing your taxes, it’s important to remember the little things add up. Having a high level of awareness during tax season can give you an advantage for some serious maximum savings during tax season.
The following are tips and tricks you can use to maximize savings during tax season.
1. File Separately
Do you know there are times when married couples are better off filing their taxes separately instead of jointly? Depending on your willingness to complete a second tax return, and based on the additional time and money required to prepare forms, couples who choose to file separately may experience tax savings.
So when does it make sense for married couples to file their taxes separately?
- If you have a similar income as your spouse
- If you have miscellaneous deductions
- If you don’t want to be responsible for your partner’s tax bill
In these scenarios, you may be able to benefit from a lower tax bracket or the ability to maximize your deductions. You might find that your spouse has past-due tax bills, which could result in a deduction from your return if you file jointly. Talk it over and decide what route is best.
2. File Electronically
The benefits of filing your taxes electronically are numerous. Tax software is simple to use and there are many discount codes that you can find for tax filing software. Software like TaxSlayer is offering you an opportunity to file your federal and state taxes for free. They also have discounts if you’re self-employed and filing a 1099.
Other tax software companies like ezTaxReturn offer a free federal return for simple returns. If you don’t think you’re savvy enough to file your taxes independently, don’t worry because you can get help online from professionals.
Filing electronically has added benefits other than saving on your fees. Some of those benefits include:
- A faster return
- Technology that double-checks your work
Shop around for the best tax filing software that will fit your needs and ease the process.
3. Claim Lesser-Known Medical Expense Deductions
We’ve all been there before: unexpected medical bills and prescriptions can take a toll on your year’s financial outlook. While there’s always some stress involved when handling medical expenses know that Uncle Sam provides relief in the form of tax deductions.
So, what are the rules regarding medical expense deductions? For 2019, know that you can’t claim deductions until the sum of tax-deductible medical expenses exceeds 7.5% of your Adjusted Gross Income (AGI). In the event that your AGI is $40,000, then the first $3,000 of medical expenses you accrue cannot be tax deducted. Every dollar after the 7.5% of AGI threshold will be eligible for the medical expense deduction.
What Medical Expenses Are Tax-Deductible For 2019?
- Birth control
- Contact lenses and eyeglasses that are medically required (includes saline solutions used for contact lenses)
- Lasik eye surgery
- Crutches (purchased or rented)
- Pregnancy test kits
What Medical Expenses Are Not Tax Deductible For 2019?
- Controlled substances
- Cosmetic surgery
- Hair removal
- Funeral expenses
- Nutritional substances
- Maternity clothes
For a full list of what is included and excluded in the medical expense deduction, visit irs.gov.
Tax Season Savings
Tax season is either highly anticipated or woefully dreaded. Get the most out of your tax return by saving on filing fees, finding the best deals and maximizing your deductions. There’s no time like the present to file your taxes and stack up the savings.