Tips to Get the Best Tax Refund - Are You Doing This?

Tips to get the best tax refund are extremely important when it comes to getting the largest tax refund possible. No one likes paying taxes, but since there's nothing we can do about it, your best bet is to get great tax refund advice and follow these tips to get the best tax refund.

Best Tax Refund Tip #1 - Hire a Professional

With all the tax refund software and online sites that help you prepare your own taxes, it's tempting to wing it on your own. And if you tax-savvy, this may be okay for you. But for the majority of the people, it's best to stick with the experts.

The "experts" consist of retail tax franchises like H & R Block, Jackson Hewitt, and Liberty Tax Service or local independent tax firms. Which is best? If you have a straightforward tax return, you'll do all right at a retail tax franchise.

However, if you are self-employed, have a complicated situation, or want to dig deeper for more tax deductions, you're better off choosing a local independent tax firm, CPA, or an enrolled agent. These professionals are trained in the tax needs of individual and small businesses in their area and can give you the best tax refund advice.

CPAs are trained is specialized areas like business consulting, audits, and taxes and may not handle your regular tax issues. Enrolled agents specialize in complex tax issues and work to get you the best tax refunds. Getting professional help with your taxes is the one of the best tips to get the best tax refund.

Best Tax Refund Tip #2 - Claim All Expenses

It's often confusing as to what you can and cannot claim for expenses. That's why it's so important to work with a tax expert to get the best tax refund advice. Some of the expenses you can claim are:

Work Expenses - business fees, union fees, professional association fees, travel expenses, equipment expenses, tool expenses, work uniforms.

Business Owner Expenses - restaurant bills if business related, portion of mortgage, portion of property taxes, portion of utilities, portion of insurance, office supplies, electronics, home office furniture.

Medical Expenses - doctor visits, medication expenses if you've passed your threshold.

Education expenses - interest on student loans, cost of education for improving or maintain your job skills.

Job Search Expenses -resume preparation expenses, postage, phone expenses, travel incurred going to and from job interviews, career counseling.

Tax preparation - professional tax preparation costs, tax preparation software costs.

Real estate -mortgage interest, refinancing costs, sale of main residence

Best Tax Refund Tip #3 - Claim All Charitable Donations

Great tax refund advice to follow is to deduct every charitable donation you make during the year. This includes fund raising events, money you donate to charities, or items donated to charities like clothing, furniture, or household items.

Best Tax Refund Tip #3 - Diligent Retirement Planning

IRAs and 401Ks are a good thing, but you must pay attention. Any time you put money for your retirement into a 401K or Individual Retirement Account (IRA) you get a tax break from the government. But remember, you are required to receive a minimum distribution when you become 70 1/2. If you don't, you may receive a 50% excise tax unless you have a Roth IRA.

If you take an early distribution from your 401K or IRA before turning 59 1/2, you'll get a 10% early distribution penalty on your federal and state tax. And if you take a large distribution, it might even bump you up into a higher tax bracket.

Best Tax Refund Tip #5 - Claiming Babies

Everyone knows you can claim dependents, but if you had a baby and want to claim him as a tax deduction, you must have a social security number before you file your tax return. You can't claim a dependency deduction without one so plan ahead.

Best Tax Refund Tip #6 - Head of Household

If you're a custodial parent, you still have the right to claim head-of-household status, dependent care credit, and earned income credit, even if you've released the right to claim your child as a dependent.

Best Tax Refund Tip #7 - State and Local Sales Tax

This is one of the tips to get the best tax refund that many people overlook. This deduction only benefits those who have no income taxes. If you paid more in sales tax than you did in income tax, you may help you get the best tax refund.

Best Tax Refund Tip #8 - Disaster Relief and Theft

If you're the unfortunate victim of a natural disaster or theft in the past year, you can claim this as deductions. Claim ice storm, flood, tornado, earthquake or any other natural disaster damage you can. You can also deduct loss from theft.

Best Tax Refund Tip #9 - File an Extension

If you can't file your tax return by April 15th, file an extension. If you don't have the money for the taxes you owe, and you don't file an extension, you'll receive a late-penalty of 5% interest for every month. It's best to go ahead and file the extension to avoid this extra cost. Many people overlook this tax refund advice and add unneeded tax expense.

Best Tax Refund Tip #10 - Keep Accurate Records

You want get the best tax refund possible if you don't keep accurate records and receipts. For everything you claim or deduct, you must be able to prove. If you are self-employed and you want to claim your postage or office supplies, you must have the receipt. The same goes for any travel expenses, hotel costs, or food costs you want to claim. All of these deductions are legal and help you get the best tax refund, but you must be able to prove it.

Follow These Best Tax Refund Tips

Along with following these 10 best tax refund tips, some of the best tax refund advice you can follow is to stay organized. Now that you know what tax deductions you can take, keep up with them throughout the year.

In January, you should make it a practice to set up a filing system for each tax deduction. Keep a file for medical costs, home repairs, education expense, home business expenses, etc. This way, when tax time comes around, you'll be fully organized and prepared. Filing your taxes won't be such a headache, you won't get stuck with any late-filing penalties, and you'll get bigger tax refund all by following these tips to get the best tax refund.