8 Sneaky Ways to Get More Back on Taxes in 2021
Sneaky ways to get more back on taxes in 2021. Legally speaking, you want to pay as little tax as possible. Meanwhile, you seek the highest refunds and deductions. So, ZAKIR CPA, PLLC shows you the sneaky ways to get more back on taxes in 2021.
Multiple sleek methods can bring you major tax benefits. Want to get a big tax refund this tax filing season? Fresh tax tips and tricks from experts prepare the best return in 2021.
1. Filing status: Sneaky ways to get more back on taxes in 2021
Single, married, or head of household status gives you separate tax privileges.
The “head of household” status allows you household maintenance costs. Besides, you may have a qualifying dependent such as your children, aging parents, or else. So, you can claim a huge refund apart from enjoying a standard deduction.
Usually, married couples prefer joint filing. However, many partners file separately if one of them has massive medical expenses. Hence, your adjusted gross income shrinks with increased deductions.
2. Work from home deduction: Sneaky ways to get more back on taxes in 2021
So, how to maximize your tax return?
Home offices involve surprising deductions. Home workspace is inviolable and must be designated for work, clients, store, etc.
Therefore, you can annually deduct rent plus utility fees. Office supply bills, cell phone & internet bills bring in deductions. Office supplies include computer parts, shipping costs, advertising costs, membership dues, and business travel.
3. Retirement portfolio: sneaky ways to get more back on taxes in 2021
Now, how to get more money back on taxes?
Expand your retirement package. This smart tax reduction policy doubles up your dividends. Make a contribution to your IRA for a tax deduction of up to $6,000 ($7,000 if you are 50 or older).
An individual retirement arrangement (IRA) allows you to set aside money for retirement. Any age limit does not restrict your contribution to an IRA.
By the way, compensation for purposes of contributing to an IRA does not include earnings and profits from property, such as rental income, interest, and dividend income. Also, you cannot use any amount received as a pension or annuity income, or as deferred compensation.
4. Charitable contributions: sneaky ways to get more back on taxes in 2021
Donations to qualified charitable organizations bring you deductibles. Anyway, you must preserve those receipts and relevant written records. Eventually, they confirm the value or cost of your donations.
In 2021, single filers can deduct up to $300 of cash contributions to charities. Similarly, it enables a joint filing for a married couple. Therefore, they deduct up to $600 of non-itemized charitable contributions.
If you provide supplies to your local shelter, you get deductions as well. If you have mileage on your kid’s charitable programs, you can deduct 14 cents for every mile. Our tax consultants put together some other sneaky ways to get more back on taxes in 2021
5. Adoption credit or exclusion
If you have adopted a child under age 18 or a disabled individual, you qualify for tax benefits. It helps offset reasonable and necessary expenses.
Here, the maximum tax credit stands at $14,300 per child. If an employer provides benefits for such expenses, you can curtail up to $14,300 of benefits per child from income.
Benefits in excess of that amount are taxable income.
You can claim both the credit and exclusion for this. However, one cannot claim the same expenses for both benefits. Hence, you know how to get more back on taxes.
Note: Special rules apply if the adoptee is a U.S. resident or not.
6. Claim your credits
Note: Tax credits yield larger tax reductions than deductions.
Common tax credits include the Earned Income Tax Credit. It helps taxpayers with low and moderate incomes. It goes up to $6,728 for three or more qualifying children in 2021.
Also, consider the Child and Dependent Care Credit of up to $4,000 for one and $8,000 for two or more qualifying persons in 2021. This credit is available to some taxpayers who are working or looking for work. Besides, take into account the Child Tax Credit for up to $3,600 per qualifying child.
You must explore your eligibility to claim these and other tax credits. Normally, it depends on your income, filing status, and eligible dependents.
So, tax credits can massively downsize your tax liability to the IRS. In some cases, you can even claim refunds despite you having no tax obligations in 2021. You have a better answer on how to get more money on a tax return.
7. Business travel expenses
Let’s review another way on how to maximize tax returns?
Do you travel away from home on temporary assignments? Claim deductions on travel expenses. For business, profession, or job, the IRS considers travel expenses to be necessary expenses.
Mostly, your employer reimburses you for such expenses. Now, you can exclude the reimbursement from your income. However, you cannot deduct costs from that.
8. Casualty, disaster, or theft
Casualty to your home, household items, and vehicles get you deductions if caused by a federally declared disaster. For example, hurricanes, tornadoes, and wildfires qualify you for tax reliefs.
In addition, theft losses can result in tax deductions. Businesses often suffer casualty or theft losses. Those can entitle you to deductions too.
Special rules apply for the amount of deductible amount.
As a taxpayer, you can refer to IRS publications to review your eligibility before claiming any of your tax returns.
Right away, you can tap into these sneaky ways to get back more on taxes in 2021. This year, our top tax tips and guidelines bring you a smooth filing. In the end, you are well prepared on how to get the most taxes back.