Adult moment: There are only a few more weeks until that looming April 15 deadline, which means (we knowww, we're sorry) you can't put off doing your taxes anymore. But instead of thinking of it as a waste of a perfectly good almost-spring day, consider this: Most people got a couple thousand dollars back last year. So...not bad?
We chatted with TurboTax accountant Lisa Greene Lewis to get her best tips for scoring the biggest refund possible, plus everything else you're wondering, like why your coworker with the same job title got back way more money than you. Read on...
So, I procrastinated and am filing my taxes right before the April 15 deadline. Did I miss out on getting any extra money?
"People who wait until the last minute to file tend to forget receipts for deductible expenses like donations made to charities, business expenses, and education expenses. Last year, the average refund for tax payers was close to $2,800, so get started now."
When should I pay someone to do my taxes and when should I suck it up and do them myself?
"If you're one of the 60 million taxpayers with a relatively simple tax return (a 1040EZ or 1040-A), there is no need to pay someone to do your taxes for you. Even if that's not the case, you can absolutely do your own taxes and avoid paying hundreds of dollars for tax prep. If you have a more complex situation, DIY tax prep products like TurboTax will guide you through the process by asking you simple questions about things like rental income, a mortgage, or other investments and then it will do all the calculations for you so you can file confidently."
Obviously I want to get as big of a refund as possible. Are there any smart ways to get more money that I might miss?
"Many of then things you do in everyday life can be worth a valuable tax deduction. Here are some of the smartest ways to maximize your refund:
- Clean out your closet: Donating old stuff to charity is a win-win. Just make sure and get a receipt for the donations you made so you can take the deduction. If you're not sure how much your donations are worth, check out TurboTax's free It's Deductible calculator.
- Factor in your live-in boyfriend: If you supported your partner or friend while they lived with you for an entire year, you may be able to deduct up to $3,950!
- Deduct your student loans: You may be able to deduct up to $2,500 in student loan interest. You also may be eligible for education tax benefits, like the American Opportunity Tax Credit worth up to $2,500 and the Lifetime Learning Credit, worth up to $2,000.
- Get money back for job hunting: Job search expenses (including resume prep and agency placement fees) may be deductible—even if you didn't land the gig. The search just has to be for a position related to your current profession.
- Medical expenses: If you traveled for medical treatment, you may be able to deduct some of those expenses."
I finished filing and owe quite a bit of money, which I can't afford to pay all at once. What are my options?
"Owing more than you can pay upfront may cause you to think twice about filing, but that will just make it worse. Even if you owe money, file on time. An extension is just an extension of time to file and not to pay up. The IRS now allows you to pay your outstanding taxes in installments over six years, which you can work out at IRS.gov or calling directly."
My co-worker and I have the same job title, but she got a bigger refund than me. Why?
"I hear this question quite often, but everyone has different tax situations and tax deductions/credits that they are eligible for. TurboTax, for example, checks for over 350 tax deductions and credits and asks questions relative to your specific situation so you get the ones you deserve."
This is the first year health insurance in mandatory. I work independently and don't have any. Will I be fined?
"If you were uninsured in 2014, you could face a fine of $95 or 1 percent of your income, whichever is higher, but your tax deductions and credits could offset that penalty. There are also over 30 exemptions from the penalty, ranging from income not meeting the IRS filing requirement to hardships like receiving a foreclosure notice."
My health insurance is through my work. Do I have to do anything differently when I file now that health insurance is mandatory?
"Nope. For you, reporting your health insurance status is as simple as checking a box."
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