Tax Savings Tips: Tips for Filing Your Taxes
April 1, 2021| Louis Tully
The last thing you need in the middle of a financial crisis is a tax bill from Uncle Sam. But don’t worry: with a little effort, and these tax savings tips from top money experts, we’ll show you how you can save hundreds of dollars on your taxes. And if the amount you are saving from taxes isn't enough to get you by, we'll explain how car title loans can help in an emergency.
Tax Savings Tips: How to Save Hundreds of Dollars
1. Make Some Changes on Your W-4
The W-4 form is the document that tells your company how much tax they should withhold from your salary.
Now, look at your income tax records. Did you get a large tax bill last year? Then increase your withholding tax so that you have to make a major payout again during tax season.
But if you got a large income tax refund, then lower your withholding tax. While it’s always nice to get a windfall, you’re actually straining your finances by reducing your take-home pay each month.
2. Deduct Medical and Dental Expenses
Don’t throw away your receipts! If you had to pay for expensive medical or dental treatment, you can declare that as a tax deduction.
Aside from diagnostic tests, prescription drugs, and hospital bills, there are many treatments that people tend to overlook:
- alternative treatments like acupuncture (if they are prescribed by a doctor)
- wheelchairs or home renovations needed for a disability
- breast pumps or prescribed baby formula
- blood strips and kits used for managing diabetes
- prescription glasses, contact lens, hearing aids or other treatments for eyes and ears
- fees for nurses or other attendants for assisted care
- drug rehabilitation programs
- doctor-prescribed smoking-cessation efforts like patches
- therapies and other special education cost for autism, ADHD and similar conditions
You can deduct any medical expenses that are greater than 7.5% of your gross income. You will need to present receipts and other supporting documents, so make sure these are on file so you can use those tax savings tips.
3. Get Paid for Paying It Forward
Donations to charities are tax-deductible—and they don’t have to be big, either! You can get deductions for ingredients you donated for a food drive, or even the miles you drove a week to a place where you volunteer. Just keep your receipts and records!
4. Check if You Qualify for Earned Income Tax Credit (EITC)
If your annual income is lower than $57,000, you can get a tax credit of $7,000! The amount depends on your income levels, and things like your marital status or number of kids.
Unlike tax deductions which lowers how much of your salary is taxed, tax credits are actually deducted from the total amount of taxes you have to pay. That’s money in your pocket – and one of the best tax savings tips if you recently had to suffer a loss in income.
5. Put More Money in Your Retirement Fund
Did you know that any income that you put in your 401(k) is non-taxable? You can divert as much as $19,500 per year, with an additional $6,500 if you are older than 50 years old. That way, your money goes to your future, rather than to the government. One of the best tax savings tips!
This is an even better option if your employer matches your 401(k) contributions – it’s like getting a regular bonus from your company.
6. Change the Way You File Your Taxes
Most married couples file joint income tax returns, but one of the easiest tax savings tips is to consider filing your taxes separately.
While it requires more effort and paperwork, you can get more tax deductions especially if one of you had COBRA payments from unemployment or underwent expensive medical treatment.
If you have kids who are below the age of 17, you can both still file for Child Tax Credit, but with a maximum of $2,000 each. (For joint income tax returns, the cap is set at $400,000).
If you are single but are responsible for a qualified dependent, then file your taxes as the Head of Household. A qualified dependent can be a child or elderly that has lived with you for at least 6 months. You can also declare a dependent who doesn’t live with you, but whose expenses you shoulder.
7. Ask for Subsidies on Dependent Care FSA
If you take care of young children or elderly parents, then this is one of the best tax savings tips! You can ask your employer to send some of your income to a Dependent Care FSA account. This money is exempted from taxes, and can be used to pay for daycare, after-school programs or nursing/assisted-care services.
Title Loans: An Easier Way to Raise Cash
In tight financial times, you need to constantly find ways to save on anything, whether it’s taxes or your household expenses. But even the most frugal, money-savvy person can still go through sudden financial emergencies. Medical bills, car or house repairs, urgent travel. You need to come up with money in just a few days, and you don’t know where to go.
Title loans can help you raise emergency cash—and thankfully, they’re easier to get than tax deductions and tax credits! Especially if your tax refund isn't what you hoped it would be, an Arizona title loan can help.
What Are Title Loans?
Title loans are short-term loans where you use your vehicle as collateral. This can be a car, truck, or SUV. It just needs to be registered under your name, and be lien-free or have no outstanding loans or judgments against it.
Benefits of An Arizona Title Loan
- You don’t need a high credit score
- You can continue to use your car during the duration of the loan
- It’s easy to apply—you just need to show your driver’s license, a government-issued ID, and your vehicle title
- You can get the cash the same day your loan is approved
How to Get A Title Loan Online
Southwest Title Loans in Arizona is one of the most trusted providers of title loans! We are known for our friendly customer service and convenient application process. Go to our website and fill up an online form, and someone from our branch will call you—you don’t have to stand in line or be put on hold! The customer service representative will explain the process, and answer all your questions. Then, the only thing you need to do is have a vehicle inspection and show your documents for verification—a process that takes less than 30 minutes!
Read our website to find out more about our emergency title loans and other smart, simple ways to raise extra cash. Follow our tax savings tips to help you succeed.