Maximize Your Refund with Smart Record-Keeping Tips for Individual Taxpayers For individual taxpayers, the biggest challenge every tax season is often getting the most out of your refund. You may feel like you’re doing all the right things when it comes to filing your taxes, but you still end up missing out on valuable deductions and credits. That’s why smart record-keeping throughout the year is so important—it can have a big impact on how much you get back come tax time. Here are some tips to help you maximize your tax refund while making sure that you stay compliant with federal and state laws. The first step in smart record-keeping is to keep track of all sources of income throughout the year. This includes wages from employers, as well as any self-employed or freelance work, investment dividends, alimony received, unemployment benefits, Social Security benefits, and more. Keeping detailed records of all income sources will make filing your taxes a lot easier come April. Next, make sure to save all documents related to expenses that relate to taxes such as charitable donations, unreimbursed job expenses that are related to business travel, or other miscellaneous expenses required for employment purposes. Additionally, if you own a home or rent an apartment, you should save documents associated with mortgage payments and real estate taxes paid during the year. These documents may be needed at tax time to qualify for certain deductions and credits. Finally, if you made an estimated payment towards taxes throughout the year – such as when paying quarterly estimated income taxes – then make sure these payment records are also kept safe and accessible during tax season. For business owners or those who are self-employed, tracking expenses associated with running a business is even more important since they can qualify for various deductions that reduce taxable income on their returns. Businesses should also track information related to employees such as wages paid out during the year since this can generate additional credits at tax time depending on their employee size and location. By keeping accurate records throughout the year regarding sources of income and other deductible items such as charitable contributions it’s possible for individual taxpayers to maximize their refund amount when filing their annual return on April 15th (or later if an extension has been granted by the IRS). With informed record-keeping practices in place from January through December, this task becomes less daunting each coming tax season without needing any extra stressors added when it comes time to file returns. The key takeaway here is that smart record-keeping doesn’t have to be complicated nor does it need additional tools outside good old pen & paper — just follow these guidelines consistently over the course of each individual’s fiscal calendar & they’ll find themselves better prepared than ever before! To learn more, contact us today.
