If You Didn’t Get a Refund: How to Boost Your Chances Next Tax Season
If You Didn’t Get a Refund: How to Boost Your Chances Next Tax Season

Didn’t get a refund this year? Check out these tips to increase your chances of getting one next tax season.

Tax season is coming to a close, though not everyone got money back. If you want to avoid owing taxes when you file next year, or if you’re simply looking to maximize your potential refund, here are tips on what you can do for the 2018 tax season.

1. Adjust Your Withholding

This may be the biggest, simplest change you can make now to impact your return for next year. Withholding refers to how much money you allow your employer to hold from your paycheck to give to Uncle Sam. By adjusting your W-4 to withhold more money, you’ll receive less per pay period, but you’ll increase your chances of getting a refund next tax season.

The recent Tax Reform means lower tax rates and increased standard deductions for everyone, making now an important time to check your current withholding. In addition, life change events, like getting a second job, getting married or divorced, or having a child, are good reasons to revisit your withholding throughout the year.

If you’ve been burned by unexpectedly having to pay taxes in the past, withholding more could be your solution. The earlier in the current year you adjust your withholding, the more impact it will have on your next return.

2. Check Your Filing Status

Your filing status is one of the first things covered when filing your tax returns, and it’s critical to how much you pay or get back. It determines your standard deduction, filing requirement, credits you’re eligible for, and the amount of tax you pay.

With five statuses to choose from, a little filing status research can go a long way toward getting a bigger refund.

3. Cash in on Credits

Credits work better than deductions as refund boosters because they reduce any federal income tax you owe dollar-for-dollar.

Earned Income Tax Credit (EITC): For the 2018 tax year, qualifying for the EITC can score you a credit of up to $6,431. In addition to meeting the following criteria, your investment income must be $3,500 or less—meaning you won’t qualify if you earn more than $3,500 in interest, dividends, capital gains, or even certain types of business investment income.

Child Tax Credit (CTC): As part of the recent Tax Reform, more taxpayers will be eligible for the CTC, which can be worth as much as $2,000 per child. Your children must be under 17 at the end of the tax year to qualify.

Education credits: If you’re enrolled in college, or if you have dependents enrolled, you could get a credit of up to $2,500 for qualified expenses through the American Opportunity Tax Credit (AOTC). If you have no tax liability, then up to $1,000 from that credit could be refunded to you! Read more about education credits and deductions here.

Saver’s Credit: If you put money toward a 401(k), 403(b), 457, or the government’s Thrift Savings Plan in the past year, your contributions can get you a credit. The Saver’s Credit is specifically designed to help low- and middle-income workers. To get the credit, you must meet certain requirements and fill out an additional form (Form 8880) and attach it to your 1040.

4. Deduce Your Deductions

While credits can lower the amount you owe and increase your potential refund, deductions lower your taxable income. All taxpayers get a standard deduction. For the 2018 tax year, the standard deduction amounts have increased to $12,000 for individuals, $18,000 for heads of household, and $24,000 for married couples filing jointly or surviving spouses.

As an alternative, you can choose to itemize your deductions, which you should only do if the amount adds up to be more than the standard deduction amounts. Common deductions you can itemize include mortgage interest, charitable donations, state income and property taxes, and medical expenses. If these add up to be more than your standard deduction, you can score a bigger deduction by itemizing.

Some deductions don’t require itemizing to be deductible. Examples include student loan interest, contributions to a traditional IRA, certain alimony payments, and Self-Employment taxes including Social Security and Medicare taxes.

Do you have any other tips for next tax season? Share below and include your store number!