It was a rough year for all of us and for a lot of different reasons. But the good news is, 2020 is finally gone and it’s time to move forward. A lot of Americans are looking forward to getting a tax refund this year, but if you didn’t earn as much last year, it might not be the refund you were hoping for. If you’d like to increase your refund in 2022, here are a few ways you can help boost it in 2021…
Change your filing status: If you’re married and filing jointly, you may be able to get a bigger refund if you file separately. It could be more work to file separately, but it might be worth it if you’re looking for a few extra bucks. If you’re not sure about changing your filing status, consult a tax professional and get their opinion.
Take advantage of tax credits: If you’ve never taken advantage of a refundable tax credit, you should see if you qualify. If you have kids, you may be missing out on an opportunity to claim the Earned Income Tax Credit. The amount of benefit you receive is dependent on your income and the number of children you have. This often-overlooked tax credit may be something you can take advantage of.
Put more in your retirement account: When contributing to a traditional IRA or 401k plan, those contributions come from pre-tax dollars. By lowering your taxable income, you’re paying less to the government, while also putting more away for the future.
Give more to charity: You can claim donations on your tax return if the organization you’ve donated to is a tax-exempt 501(c)(3) organization such as your church or the American Red Cross. And not only will you be able to claim the deduction, but you’ll be able to help out an organization that you care about.