5 Helpful Tax Services to Increase Your Tax Return

The structure of your income can have a huge impact on your tax burden. There are several steps that you can take to protect your income from a higher tax rate, even if you take on a new business venture to boost your income. Of course, you will need to set up these income streams correctly to get the best results.

1. Retirement Vehicles

If you and your spouse have set up your home life so they can stay home with children or participate in other pursuits important to you both, they may not have an income. While this doesn't mean they're not working, for the purposes of tracking their income on a tax return, they're a non-working spouse. If your spouse is currently working part-time while going to school, the steps below can also benefit your collective retirement later and may lower your tax burden now.

Consider setting up either a traditional or a Roth IRA for this spouse. Depending on your age and income, one vehicle may be better than the other, but both could be a boon to your retirement plans in future years. The traditional IRA could lower your tax burden now, and the Roth IRA earnings will be tax-free later.

2. Charitable Contributions

Discuss your charitable goals with your tax professional for the greatest benefit to all concerned. Each of us has causes that are dear to us, and giving them our

● time

●  dollars

●  verbal support

can keep these organizations going in tough times. Carefully track all the thank you notes and confirmations that you get from your donations so you can get the full deduction for your charitable donations.

3. Check Your Deductions

The highest deduction rate is to claim Single and 0 dependents. You can also deduct more each month to reduce the need to pay estimates, to pay in before 4/15, or to have to pay a penalty.

Many experts recommend that we avoid paying in too much and encourage taxpayers to strive to hit a $0 goal; nothing in the tax return with nothing to pay in. This limits the amount of time that we give our federal and state governments a free short-term loan.

However, for many of us, the spring tax return is a form of bonus savings. If you struggle to save, or if you have sizable expenses that crop up in the spring and make it hard to manage your debts, a tax return can be a financial boon that you come to count on.

4. Pay Estimated Tax

For those who do get a financial boom during the year, such as from the sale of a home, get an estimate of the tax you will owe on it from your tax professional and make an estimated payment while you have the funds.

Again, it would be nice to think that you would have the dollars available in the spring. However, if you take the dollars gained from your financial boon and invest in something you need or pay down another debt, by the time the tax payment is due, you may struggle. Paying an estimated tax while you have the dollars at your fingertips may mean that you get a bigger tax return and lower your stress level.

5. Keep the IRS Happy

In the rush of keeping your business and your life moving forward, it can be easy to avoid correspondence from the IRS. Honestly, they seldom contact taxpayers with good news. However, if they come to your door you will have to find a way to deal with the revenue officer and the debt they are trying to collect.

If you do get the knock on the door from the IRA, carefully guard your mouth and review your options. Contacting a professional and receiving excellent revenue officer representation can save you dollars and blood pressure points.

If you put your tax return to the best use for you and your family, there's no reason not to treat it like a savings account. For those who struggle to save, however, consider taking a chunk of your next tax return and stashing it away in an untouchable account. By adding to this account regularly, you can build a savings habit that will make the bonus of a tax return a nice surprise rather than an expected event.