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Updated for tax year 2023.
With each passing tax year, it’s possible to find more efficient ways to file your taxes. As you file your taxes each year, you gain new knowledge about your tax situation — you may even learn how to maximize your tax refund next year or determine how to owe less in taxes the next time around.
Whether you’ve filed your income taxes for this year or you’re still planning to do it soon, here are some of our top tax tips to teach you about better tax preparation and hopefully get you the tax outcome you desire next year.
Tax deductions and tax credits
There are many tax deductions and tax credits available to taxpayers, but each has its own requirements you have to meet to claim it.
When you file, you’ll want to know what tax deductions and credits you can take and their worth. Ask yourself: Are there any tax deductions you planned to take that you missed out on this year? What was the cause? Would finding ways to lower your taxable income next year help you qualify for more tax breaks next time?
Some common tax deductions you may be able to take include the student loan interest deduction, the IRA deduction, a medical expense deduction, and more. Common tax credits you may qualify for include the Child Tax Credit, Earned Income Tax Credit, or educational tax credits like the American Opportunity Credit or the Lifetime Learning Credit.
To learn more about what tax deductions and tax credits might be available to you, check out our article Know More About Tax Deductions and Credits.
How much of a tax 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, how much of a tax refund you receive will likely stay the same from last year (unless new tax laws go into effect).
However, if your income amount or tax situation changes drastically, it may be a good idea to use our Refund Booster1 to ensure your tax refund doesn’t come as a shock next year. This tool helps you fill out a new W-4 form to give to your employer. How you fill out your W-4 form can determine how much of a tax refund you receive next year. Whether you want a large tax refund or you want to come out as close to $0 as possible, we can help you fill out your W-4 form to get the result you desire next year.
For more information about tax refunds, check out our comprehensive tax refund guide.
Can I apply my tax refund to next year’s tax return?
Yes, you can allocate any overpayment of this year’s tax toward next year’s federal or state taxes if you wish. TaxAct® can help you do this if you file your taxes using our tax preparation software.
Determining how much tax you may owe next year
Along with figuring out how much of a tax refund you could receive next year, this year’s tax return may also indicate how much you’ll owe the IRS next tax season. This would apply if you’re staying in the same job or expect to make the same amount of money and take the same tax credits and tax deductions next year. It likely won’t be precisely the same, as your expenses could fluctuate throughout the year, you may be able to claim more or less in tax deductions, etc. But there typically won’t be much discrepancy if your income, filing status, and dependents stay the same.
Ways to make tax planning easier next year
There are a few ways you can make tax planning easier next year:
Tracking and organizing receipts
For instance, let’s say that this year, you weren’t consistent about separating your business expenses from your personal expenses, and at the last minute, you had to scramble to figure out where your money went. To better prepare for next year, having a separate business credit card or business bank account may be a good idea to keep your records separate. Using a spreadsheet or utilizing tax planning software to track your expenses could also be a good option.
Plan for your tax deductions ahead of time
Another way to make filing taxes easier next year is to look at the possible tax deductions you can take and plan accordingly. For example, 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, you can figure out how much square footage of your home it occupies so you know how much your tax deduction will be. 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.
Finding a better method for filing
Filing your own taxes shouldn’t have to be complicated. If you struggled with filing taxes this year, you may want to find a more efficient filing method for next year. 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 your filing needs.
Using TaxAct to file your taxes
TaxAct offers several different filing options. You can also take advantage of our Xpert Assist add-on feature, which lets you connect with a tax expert to answer questions that may come up when filing2.
To get started, simply head over to TaxAct and pick out the best plan for you. With our help, you’ll be well-prepared for this tax year and the years to come.