How to Get a Higher Tax Refund and Have More Money to Save!
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We all dread the tax refund time, gathering our receipts for the year prior, figuring out what we may own, and also looking at what we might get back. For those who are expecting a refund this year, we might be planning everything we want to buy. That new trendy item… home renovation or a spa day. Although that extra check may be unexpected and nice to spend- it’s also important to value the idea of saving. Saving will ALWAYS benefit you long-term!
This week we’re covering ways to get a higher tax refund in 2024 and what to do after you get that check!
Utilizing Your Savings Accounts
One of the best and most popular ways to save money on taxes is to contribute to pre-tax savings and retirement funds, such as a traditional IRA or 401K. These accounts allow you to save for the future while not being hit with taxes. Talk to your current employer if they have a program set in place, or conduct your own research to open your own.
A health savings account, or HSA is also another tax-deductible option where you can contribute money, it will grow tax-free and then you are able to withdraw it tax-free if it’s a qualifying health expense under your plan. It’s a great way to save on taxes, and be prepared for any medical emergencies, procedures or fees you may face!
It’s important to note that regular savings account or high-yield savings account are not tax deductible. If you’re wanting to learn more about the other benefits of high-yield savings accounts, check it out here!
Itemize everything you can!
Before beginning this process, it’s important to know the standard tax deduction based on your filing status. Your itemized deductions total should be greater than that in order to be worthy of itemizing it! You can check the standard tax deduction here.
Itemized deductions can vary, but some common ones include:
- Mortgage interest
- Property taxes
- Medical and dental expenses
- Charitable donations
It’s important to note that these have certain guidelines and restrictions. Consider conducting your own research based on your specific needs or talking to a financial advisor or accountant!
AND Keep Saving!
Consider opening a high-yield savings account to jumpstart your savings and creating buckets to open emergency funds, rainy day funds, vacation funds etc. It’s so easy for us to spend that refund check and quickly swipe our card. However, you’re $500 refund could grow significantly if done correctly!
Remember the actions that you take this year, will impact your tax return for the following year- meaning if you want to open an account or start considering your charitable donations for the following year, nows the time to do it! But always keep in mind, that saving should always be the forefront of your decisions!
