BECU has once again teamed up with TurboTax to save members up to $20. Last year, BECU members saved $242,000 by filing through BECU's Turbo Tax partnership. Through the tax filing period, TurboTax will be providing you with tips and guidance to help you file taxes easily and save money.
Laying the groundwork for a tax refund requires some simple tax planning, a little research and some forethought. Reviewing your tax status, consulting your spouse when filling out your W-4s and taking advantage of several tax credits can help you increase your tax refund. TurboTax also can help decide which credits can get you the biggest refund.
When you start a job, your employer asks you to complete form W-4. This tells your employer how much federal income tax to withhold from your paycheck. The more allowances you claim on the form, the less income tax will be held back. This will give you bigger paychecks, but a smaller tax refund (or potentially no tax refund or a tax bill at the end of the year). Factors to consider when choosing the number of allowances you claim include:
Claiming fewer allowances on your W-4 will mean smaller paychecks, since more tax will be withheld. This increases your chances of over-withholding, which leads to a bigger tax refund. That's why it's called a “refund:” you are just getting money back that you overpaid to the IRS during the year.
“Be careful, though,” cautions Caroline Thompson, an accountant and president of Thompson Accounting and Tax, Inc. in Buffalo, N.Y. “By claiming fewer allowances, you give the federal government your money for the year, tax-free.” If you're OK with that, utilizing your W-4 can help bring a tax refund at the end of the tax year.”
You can use a W-4 Withholding Calculator to help you estimate what allowances to claim.
Choosing the filing status that best suits your needs can influence the possibility of a refund. Your filing status determines:
There are five statuses to choose from, but the three most common are: married filing jointly, married filing separately, single, and head of household. TurboTax can help you determine which choice most benefits your situation.
Working families, individuals, people who are self-employed and others who have a moderate to low income may qualify for the earned income tax credit. The EITC decreases the amount of taxes owed and may qualify you for a tax refund. To qualify, you must:
To receive the EITC you must file a tax return, even if you owe no taxes.
The child and dependent care credit is based on a percentage of the amount you paid for the care of a qualifying child or dependent. The total expenses you can claim are capped at $3,000 for one eligible individual and $6,000 for two or more. If your employer offers dependent care benefits, you are required to deduct this amount. A qualifying individual is:
To claim the credit, other criteria must be met.
To get your discount, you must file through BECU's TurboTax website. Follow the link to get started.
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.