Posted on May 12th 2022
The 2022 tax season has officially begun, and you may be feeling the pressure of navigating this unique filing season on your own. Amid filing difficulties and information verification, have you considered your options to fully utilize your tax return? Here are a few tips to maximize your return for this tax season.
This tax season has been predicted as a difficult one due to details that affect your refund, such as confusing filing requirements and paused student loan debts. The number one piece of advice? File your return early. The sooner you file, the more time you have to rectify any mistakes and allow for possible delays if your refund is flagged for review.
File an Accurate Return
Increase your chances of filing a return that goes through without delay by ensuring that all information you provide in your return is accurate. Inaccuracies are a common trigger for an IRS review or audit that will most likely delay your refund. Before you file, compare your return’s accuracy against information that the IRS holds on file on your tax transcript and go over all information with a careful eye before submitting it.
File for an Extension Now if Necessary
If you expect your tax information won’t be ready to submit by the April 18th deadline, plan to file an extension before the deadline. While this may delay the payment of any refunds that are due to you, this option will allow you to file an accurate return within the 6-month grace period granted by the extension if you find yourself running late. Keep in mind that this does not exclude you from paying the taxes that you owe on time. The IRS allows extensions with the expectation that your taxes are paid before the deadline to avoid late penalties.
Claim Your Dependants Properly
Claiming your dependents for the 2022 tax season can be especially beneficial due to the child tax credit and the child and dependent care credit. Both are notably larger for this tax season than in previous years (increasing from $2,000 per child in 2020 to $3,000 per child and $3,600 per child under the age of 6 in 2021) and you may qualify to receive this amount as a refund on your return if you opted out of receiving an advanced payment earlier in 2021 or did not claim a dependent child in previous tax seasons.
Claim a Recovery Rebate Credit
The IRS has stated that if you did not qualify for the third and final round of the Economic Impact Payment sent out in 2021, or if you received less than the full amount of the stimulus payment, you could be eligible to file a claim for the 2021 recovery rebate credit on your return.
Look for Tax Deductions
Tax deductions can often lower your tax bill or increase your tax refund on your return, but there are likely many deductions that you are not aware of. Seek out tax deductions that apply to you and be sure to include them on your return before filing.
Don’t Accept the Standard Deduction
The standard deduction gives you the chance to take a tax deduction even if you have no or few expenses that are eligible for itemized deductions. While it may save time to take the standard deduction if your standard is more than your itemized deductions, you could save money by itemizing on your return if you find that your standard is less.
Use a Professional
At Paramount Tax & Accounting, our professionals are prepared to help you get the most out of your tax return during this tax season. We’ll walk you through the process, explain your options, and provide our assistance with any other tax needs. Contact our accounting firm today for a free consultation for the 2022 tax season.