What Your Tax Return Can Teach You For Next Year
Every year, you learn something new when you file your taxes. Hopefully, you figure out how to do it more efficiently each time. Maybe you discover a new way to file that takes less time, or perhaps you learn how to maximize your tax refund or determine how you will owe less the next time.
Whether you’ve filed your income taxes for this year or you’re still planning to do it soon, here are some of the top things it can teach you about tax preparation so that it’s more manageable next year.
The deductions you can take
There are many tax deductions you can take on your income tax return. You may have taken as many as you can this year, or you might have forgotten some, but now it’s too late. Either way, the next time you file, ensure you know what deductions you can take and what they’re worth. Some of the tax deductions you may be able to take include the student loan interest deduction, the American Opportunity tax credit, an IRA deduction, a medical expense deduction, a mortgage interest deduction, and the state and local tax deduction.
How much of a refund you’ll receive
If you expect to be in the same job or make the same amount of money as a freelancer or business owner next year, you can determine how much of a refund you might receive. Still, you could get a higher refund next year, especially if you use TaxAct’s My Tax Plan™, which could boost your next refund. All you have to do is file your taxes with TaxAct to gain access to this valuable service1.
How much you may owe next year
Along with figuring out how much of a refund you could receive next year, you may be able to see how much you’ll owe the IRS. This would apply if you’re staying in the same job or expect to make the same amount of money and take the same credits and deductions. It likely won’t be precisely the same, as your expenses could fluctuate throughout the year, and you may be able to claim more in deductions.
Ways in which you can make filing easier
Let’s say that this year, you didn’t separate your business expenses from your personal expenses, and at the last minute, you had to scramble to figure out where your money went. Now, you know that to prepare for next year, it’s a good idea to have a separate business credit card or bank account where you exclusively spend money on your business. Using a spreadsheet to track expenses could also be a good option.
Another way to make filing taxes easier is to look at the possible deductions you can take for next year. For instance, if you’re taking the business interest deduction, you can calculate what you paid in interest at the end of the year before filing your taxes. If you use a home office, figure out how much square footage of your home it occupies. And if you drive a business vehicle, log how many miles you drive as you go so you can deduct that mileage from your return.
A better method for filing
Filing your own taxes shouldn’t have to be complicated. After doing your taxes this year, you may want to find a more efficient way to file. You want to find a way that is both easy and cost-effective, whether you do it yourself or enlist a tax expert’s help. Thankfully, you can utilize TaxAct for all of your filing needs.
Using TaxAct for filing your taxes
TaxAct offers several different filing options. You may qualify for free tax filing or select our Deluxe, Premier, or Self-Employed e-filing products. You can also take advantage of our Xpert Assist feature, which lets you connect with a tax expert to answer questions that come up when filing2.
Go to TaxAct and sign up for the plan that works best for you. With our help, you’ll be well-prepared for this year and the years to come.