Video: Unexpected Ways to Increase Your Tax Refund
There are a number of tax credits that can help you increase your tax refund. Lisa Greene-Lewis, CPA and TurboTax tax expert, provides a guide to unexpected savings.
Video Transcript:
[00:00:04.39] TRACY BYRNES: A lot of people are worried that their refunds are going to be a little smaller this year, especially because a bunch of provisions have been taken away. Maybe you are unemployed now. Well, there are definitely ways you can get more money back and increase that refund after all.
[00:00:17.84] Lisa Greene-Lewis, TurboTax expert and CPA, is with us right now. Look, there's a lot of things out there that people forget about, right? Let's start with your filing status. I think, sometimes, people just presume they should go Married Filing Joint. Are there opportunities for Married Filing Separate people to actually do better?
[00:00:35.33] LISA GREENE-LEWIS: In general, people that file Married Filing Jointly do better, because you get more credits that you're able to take when you file as a Married Filing Jointly. For instance, some of the main credits for kids, like child and dependent care credit, child tax credit, you have to be Married Filing Jointly to get those. But there could be situations, where if each spouse, say, they're in, like, the six-figure income, they may do better filing separately. Let's say, a couple is newly married, and the other person has some tax liabilities that they're taking care of. It may be better to file separately.
[00:01:18.49] TRACY BYRNES: That's a great point, and for all the single mothers out there, Head of Household is probably the way to go if, indeed, you have the kids the majority of the time.
[00:01:27.05] LISA GREENE-LEWIS: Yes, I was definitely going to bring that up, because a lot of people think maybe I'll just file Single. But as Head of Household, so the Standard Deduction for Single is $12,950. But if you can file as Head of Household, it's $19,400. So that's a considerable difference that you're going to automatically get if you claim the Standard Deduction.
[00:01:53.98] TRACY BYRNES: Right, and if you are a Head of Household and you are taking care of all those people, you deserve the extra money.
[00:01:59.81] LISA GREENE-LEWIS: Yes.
[00:02:00.54] TRACY BYRNES: Let's talk about some of the credits that people miss. You had mentioned the saver's credit. I have to believe that this is one that lots of people miss.
[00:02:08.42] LISA GREENE-LEWIS: Yeah, the IRS reports that one out of five tax filers miss that credit, and it's a credit that you get automatically just for investing in your retirement. So it's a no brainer. It's up to $1,000, if you're Single, up to $2,000 Married Filing Jointly.
[00:02:26.63] TRACY BYRNES: That's a great credit, and the education credits, too, I think, sometimes, they come off as a little confusing, right? Don't leave those on the table either.
[00:02:35.72] LISA GREENE-LEWIS: No, you shouldn't. So the American Opportunity Tax Credit, that's for the first four years of college, whether it's your child or even for yourself if you're going for a four-year degree. And then the Lifetime Learning Credit, that's another one that people often miss, and you don't have to be earning a degree. You could just be going to take a class to improve your skills to get that promotion, and that's up to $2,000.
[00:03:04.01] TRACY BYRNES: Those are great credits. On the complete flip side, if you are getting a large sum of money back from the government, maybe rethink your withholding, right? I mean, why should Uncle Sam have your money all year long? Maybe now's the time to go to HR and say, you know what? I'm having too much withheld or not enough withheld. But either way, it's a good time to address that, isn't it?
[00:03:26.77] LISA GREENE-LEWIS: Yes, either way, I mean, some people like to have more in their paycheck, and then some people like to take more out and have a refund at tax time. But either way, you could come to TurboTax, and use our W-4 calculator, and figure out where you should be as far as your withholding.
[00:03:48.62] TRACY BYRNES: Yeah, I mean, I would think the goal at the end of the day should be zero, because you don't want Uncle Sam, the government, to invest your money all year long when you can do it yourself. Lisa Greene-Lewis, TurboTax expert and CPA, thank you for all this.
[00:04:02.20] LISA GREENE-LEWIS: Thank you for having me.
[00:04:03.87] [MUSIC PLAYING]
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