Maximizing your Tax Returns

Every year when tax time comes around, the same question stirs in my mind, "What is going to be the best way to get the maximum refund with the minimal effort?" My personal experience has run the gambit of possibilities from completing my taxes on my own, to completely turning this responsibility over to a professional. For those of us who lack the skills and tax knowledge, let us consider the the pay off. While I was learning how to complete my taxes, I would complete a sampe for myself then allow a professional to complete my return. When I was able to locate a $1500 refund, my accountant was able to locate roughly $1,000.00 more. I gladly paid my accountant $125 dollars to complete my return. I made a point to get a copy of my returns and I educated myself on each form she completed for me. Over time, my confidence grew and then I was able to complete the forms on my own. The last year my accountant completed my taxes for me was when I was able find the same deducts that she did. That was the first year I used TurboTax.

When I was teenager I remember going to the local library and picking up paper forms and I completed the 1040EZ. Easy returns are free. Simple tax returns involve entering your W-2 information and submitting your return. This service is free at TurboTax and can easily be accomplished at IRS.gov, as well. However if you are not using the standard deduction and if you are truly looking to get the most out of your refund through decudtions and tax credits, then I recommend upgrading to at least Turbotax Deluxe. TurboTax will explain all four of the different products. Depending on your situation. Turbotax Deluxe is my preference due to the program ItsDeductible. Through this program you can estimate the value of donated goods. My family frequently donates items to Goodwill Services.

I was amazed to find that ItsDeductible has an extensive database of used item values, powered by Ebay.com. When you donate a shirt on your own, you might place an arbitrary value at a dollar or two. But through ItsDeductiblethe value of that shirts is based on the price those shirts are selling for on Ebay.com, that shirt could be valued as high as $7.00. My deductions we valued at over $4,000 last year and rough $2,500 this year. I was able to deduct that amount of money from my taxable income.

Adoption credits carry over for up to five years up to a value of $15,000. In the last five years, my effective tax rate was less at less than 1%. This year I discovered that the county I lived in and went to school in was considered a federal disaster area. That means I was able to claim room and board as a tax deduction. When I enter my educational information, Turbotax decided which of three educational credits would benefit me the most and which I even qualify for. This year I used the lfelong learning credit for the full amount of $4,000. To add it all up my gross income was substantially higher than my adjusted gross income. The standard deduction for marriad couples is $10,500.00.

I was able to take over $24,000 in deductions and credits thanks to TurboTax.

Another benefit from using Turbotax  is the online version and computer based programs allow users to enter information once and then year after year it will remember your information and allow you to carry it forward. Turbotax  uses straightforward, guided information for most people to understand. The instructions for each sections go through meticulous detail in an effort to maximize your refurnds.

The cost is my main complaint but that is only based on my personal choices. This year I purchased the computer based program after completing the online version. Downloading the information was problematic and I made the choice to re-enter all of my information. I recommend purchasing the software in the store, because the software was more updated than the internet based version. The cost for federal with TurboTax deluxe was $49.99. One State refund is free but it was another $19.99 to E-file that State return. But if you have money withdrawn from you return then you have to pay an addition $29.99. For that entire pakcage you could almost hire a professional.

My suggestion is to purchase the software for $49.99 and then use the included federal E-file, and finally print out your state return and file it for free. That is how I maximized my deduction and paid only $49.99 for my refund instead of $125.00 for an accountant.

 Good luck with your returns!