How To Plan And Get The Most Of Your 2022 Taxes
Planning your taxes is key to minimizing the impact on your bottom line. Every year, you are required to file a tax return and come up with a financial tally of your tax situation.
Planning your taxes is as important as filing. It helps you determine whether you owe taxes beyond what you have already paid or whether you owe a refund of the taxes that have been withheld.
Here are a few updates you should keep in mind as you plan on filing your taxes for2022.
1. Change Your Filing Status
To get the most out of your tax return, you should consider changing your filing status. If you are married, filing your taxes jointly can bring fewer returns than if you file separately. It might be some extra work, but if you plan it, it might be worth the extra money. Consulting a tax professional and getting their opinion can also help you plan your taxes for the upcoming year.
2. Claim Your Tax Credits
If you have children, you should check if you qualify and take advantage of refundable tax credits. Claiming Earned Income tax return is often overlooked. However, you can take advantage of it and earn some extra bucks. The benefit received depends on the income and number of children you have.
3. Give Back
Charitable organizations can help you reduce your tax bill. If the organization you have donated to is exempted from paying taxes, such as churches or the American Red Cross, you can claim donations on your tax return.
This will not only help you claim your deductions but also help the organization in return. You can donate toys, clothes, books, and other household items to charitable organizations and shelters and support the needy.
4. Put Money Into Retirement
If you are getting a regular paying check, you are indeed paying taxes. Your employer withholds the taxes you owe from your earnings each pay period and sends them to the appropriate federal and state governments on your behalf.
Adding more to your retirement account will reduce your tax bill. The contributions to your IRA and 401K plan come from pre-tax dollars. By putting more money into your future and lowering your taxable income, you will be paying less to the government.
5. Use Tax Calculators
Balancing and planning your taxes is essential. There are numerous free, easy-to-use tax calculators and forms for previous, current, and future years that can help you understand your tax situation.
They assist you in making important financial and tax planning decisions and estimate the taxes you might owe or your expected tax return.
Filling taxes is not easy. However, planning your taxes and understanding what is involved in filing your taxes correctly can help you make sure that you are not paying more than you have to.