How to Guarantee You Will Get a Tax Refund Next Year

Last updated 03/19/2024 by

It seems like it was only yesterday that the world was ringing in the New Year. Now tax season is in full swing. This year, the deadline is April 18, 2016, but there’s no need to wait that long, especially if you’re expecting a tax refund. In fact, the IRS began accepting completed federal tax returns for the 2015 tax year on January 19, 2016.

If you’re hoping for a refund this year, submitting your return earlier rather than later is a smart approach. Also using an electronic filing method (many are free) helps to get your information securely to the IRS that much faster so that they can process it. Electing for your refund to be direct deposited into your bank account rather than waiting for the check in the mail can also shave off significant waiting time.

How much time, you ask? According to the IRS, if you mail in a paper return and then wait for a paper check to be mailed to you, you will be waiting up to 6 weeks or more.

Filing electronically but still waiting for that paper check will speed up the process somewhat, but you can still expect to be waiting by the mailbox for at least 3-4 weeks.

However, if you choose to e-file AND you elect to have the refund direct deposited into your account, you could be out spending that cash in as little as 14 days!

While these pieces of advice are great, they only help if you are getting a refund in the first place. The strategies listed below will help to ensure you have some cash coming back from Uncle Sam this year, and many years to follow:

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Reconsider the Number of Exemptions You Claim

When you are initially hired with a company, there is usually a ton of paperwork to fill out. One of the forms that employers need from you is the IRS Tax Form W-4. The information you provide on this form determines how much tax is withheld from each of your paychecks throughout the year. Depending on whether or not you indicate a single or married rate, along with the number of exemptions you claim, will play a huge factor on two things:

How much money you get to take home with you every payday, and
How much you will either be owing or get refunded to you at the end of the year when you file your taxes.

The principal is pretty basic: the more exemptions (or deductions) you claim on your W-4, the more take-home pay you will receive every payday. However, if you cannot account for at least that same number of dependents when it comes time to file your federal tax return, you may end up owing Uncle Sam. The same is true of the contrary: if you elect to have more taxes taken out throughout the year, then you may be in for a big refund come tax time.

By lowering the number of exemptions claimed on the W-4 form filed with your payroll department, you can ensure that you won’t be hit with a huge tax bill at the end of the year. Most employers will allow employees to make changes to this form at any time or even multiple times throughout the year. Remember, the number of exemptions your claim on your W-4 only affects the amount of money that is withheld from your paycheck. It does not affect the exemptions, deductions, or credits you claim on your actual federal tax return at the end of the year.

Be Charitable

You would be surprised how much your kindness can add up to substantial tax savings at the end of the year. Every donation you make to a nonprofit 501(c)(3) organization can help you lower your tax bill. It is usually very easy to verify a charity and their nonprofit status by simply going on to their website. Just make sure you get a receipt from the organization when you make your donation, so that you can report the proper information to be eligible for any applicable deductions.

You don’t have to donate cash to be eligible for these tax savings either! You can donate a variety of things to a worthy cause, some of which include:

Property – Everything from that old car you haven’t driven in years to the furniture taking up space in the attic. You can even make it a habit to clear out your closet every year and donate those clothes you will never fit in again to an organization that can use them.
Mileage – If you use your car to help a charitable organization, be sure to record the mileage. Every mile can add up to more savings on your taxes owed at the end of the year.
Cash – Every charity loves cold, hard cash, right? But don’t forget to include any offering or tithes that you make at your local church as well.

Contribute More To Your Future

One of the easiest ways to increase your tax refund each year, is to increase the amount you contribute to your retirement fund. Money that you place in a retirement account each year (such as an IRA), lowers your taxable income for the year. The more you put into the account, the less taxable income you will have. And the less taxable income you have, the less tax you owe for the year. This could help boost your tax refund as well as secure a comfortable future for you and your family. But make sure that you make these contributions before the annual deadline and always know what your annual contribution limits are.

Related: Find out what a Tax levy is & How to get rid of it.

Go Green

It seems that there are more and more deductions available every year for people who make eco-friendly improvements in their lives. For example, many of the costs associated with remodeling your home so that it saves more energy, not only helps reduce your monthly utility bills, but also can put some extra cash in your pocket come tax time.

Some easy ways to gain the benefits of going green include replacing old windows and doors, adding solar panels to your home’s electrical grid, replacing old and outdated appliances with more energy efficient models and even trading in your old gas guzzling vehicle for a newer hybrid model.

Making these improvements will not only help cushion your tax liability when April rolls around, but will also most certainly allow you to enjoy the benefit of lower bills all throughout the year.

Keep Your Personal Information Up To Date

Providing your accountant with current and accurate information is obviously a critical part of making sure your tax returns are filed properly. But many individual forget to report certain events like getting married or having another child. These occasions are not only a reason to celebrate when they occur, but may also have you celebrating for many years to come if you report them properly.

Some important information to keep updated with your tax accountant include:

Full legal names, marital status and Social Security numbers for yourself and any dependents you are claiming on your tax returns.
Did you move during the year? Even a local move can impact your local city and/or school tax obligation. Providing complete addresses and time period at each address will aid your accountant in calculating the exact amount needed for your return.
Also be sure to provide employment information such as the company name, address, and total length of employment at each employer along with your job title for each position you held during the year. Certain professionals such as teachers, qualify for additional tax deductions, known as above-the-line deductions, even if they do not itemize other deductions on their return.

Related reading: How to avoid Payroll Tax problems?

Decide if Itemizing Deductions is Your Best Option

For the 2015 tax year, the standard deduction is $6,300 for single tax payers and people who are married but filing separate returns, and $12,600 for married couples filing jointly. The standard deduction for taxpayers filing as Head of Household is $9,200. If your largest expenses, including mortgage interest, property taxes, and state taxes approach the standard deduction for your situation, it may make sense to itemize after you account for all the other breaks for which you may qualify.

Track Your Expenses And Stay Organized

Stuffing receipts in a box throughout the year is not a good organizational strategy and certainly won’t earn you any points with your accountant. While this “hoarding” strategy allows you to at least gather your records in one place, developing a working file system will result in less of a headache at year end when you are trying to consolidate your information into meaningful data that your accountant can use.

To keep better track of all of your relevant information, use a filing system (either paper or electronic) and organize items by expense type. This is especially important if you are self-employed, as you will have many more items to keep track of than a wage-earning employee would.

Don’t forget to break down professional expenses for each individual family member. It can make a difference when it comes to your total tax obligation. For instance, if you are married, your accountant may compare filing jointly and filing separately to determine which option is better for your situation. However, this type of comparison is only possible if income can be accurately matched with each individual.

Some examples of information you should retain include:

Mortgage Interest: This is one of the biggest expenses for many individual taxpayers. Depending on your interest rate and the size of your loan, you may be paying a considerable amount of interest with your mortgage payments each year. This interest is tax deductible.
Property Taxes: Yet another expense that homeowners are usually forced to pay, but one that is tax deductible.
Medical/Dental Expenses: These types of expenses are usually more applicable to self-employed taxpayers. However, if you had major medical or dental bills that were not covered by insurance, you may be able to include those expenses as itemized deductions.
Out-of-Pocket Business Expenses: You may be able to deduct unreimbursed expenses for licensing, continuing education, uniforms, etc. on your tax return.
Educational Expenses: These include expenses for yourself, your spouse, or your children. You may be able to claim up to $4,000 in additional deductions for qualified higher education expenses, if you meet certain income criteria.
Self-Employment Expenses: Many of the costs associated with self-employment (or having a side job) are tax deductible, including cell phone expenses, home office costs, travel, etc.
Charitable Donations: Keep receipts for any monetary or non-monetary donations that you make throughout the year to churches or other not-for-profit organizations.
Energy Improvements: In recent years, deductions have been offered for improvements that individuals make to their homes to improve the energy efficiency, such as new windows or insulation.
Childcare/Alimony Payments: Keeping track of these expenses could potentially qualify you for additional tax credits.

Related reading: Failed to pay taxes and the IRS behind you? Find out how Offer in Compromise program works giving Tax relief to defaulters.

Always Be Sure You Get The Help You Need

Tax filing can be an extremely complex matter, especially with tax laws changing from year to year. Using a tax prep software can be a huge help, and may be all the assistance you need. Many of these applications are extremely thorough and have detailed questions to ensure every base is covered.

If your situation is a little more advanced than something that can be handled by tax prep software, then you should always be sure to consult with a tax professional. These individuals know all of the changing laws and are there to help you when you need it.

Related reading: Find out how Tax Attorneys can help you with paying off back taxes.

What To Do If You Haven’t Received Your W-2

The deadline for employers to provide W-2 forms is January 31 of each year. If you don’t receive your W-2 by the deadline, contact your employer first. If you haven’t received your W-2 by February 14, contact the IRS at 800-829-1040. If you still haven’t received your W-2 form by the tax filing deadline (which falls on April 18 in 2016), file your return and attach Form 4852 – Substitute for Form W-2, Wage and Tax Statement. If you receive the W-2 after you’ve filed your return, you may file Form 1040X – Amended U.S. Individual Tax Return and attach the errant W-2 form.

In the meantime, you can begin calculating your return by referencing your last paycheck for 2015. It should contain your cumulative income and other relevant information. That way, once your W-2 finally arrives, you’ll be ready to submit your tax return immediately.

What To Do If You Haven’t Received A 1099

By contrast, if you received income from interest or dividends, sold stocks or real estate, or worked as an independent contractor during the year, you should be receiving a 1099 form rather than a W-2. The deadline to distribute the 1099 form is the same as W-2 forms, so businesses should be mailing these out before the end of January.

One big difference between the W-2 and the 1099 forms is that tax-payers generally do not need to attach a 1099 form to their Federal tax return. Most (if not all) of the information you would need from a 1099 is probably already on the documentation you already have in your files.

There is one exception in which it is necessary to include a copy of the 1099, and that is when you are waiting for a 1099-R. This form is used to report distributions from pensions, annuities, retirement or profit-sharing plans, IRAs, or insurance contracts. If you do not receive your 1099-R by February 1, contact the issuer. If you still have not received Form 1099-R by the end of February, contact the IRS at 800-829-1040. The IRS will contact the issuer and send you a replacement copy of Form 1099-R along with a letter containing instructions.

Related reading: What is a Tax Levy & Tax Lien? Find the difference.

Happy Tax Filing

We all know that figuring out an annual tax return can be a complicated matter. What is worse is when you finally complete it and learn that you owe money to the IRS. By following the methods described above, you will not only be increasing your chances of getting money back at the end of the year, but also be avoiding the headaches of not being prepared. Putting some of these actions into place now, could bring you tax savings this year and for many years to come!

Gina Young

Gina Young is an accomplished finance writer who has written for publications including Examiner.com, Lexington Law, Talk Markets, CreditRepair.com as well as her own blog (Money Savvy Living), giving budgeting and frugal living advice. With a bachelor’s degree in Accounting and Finance from Ashland University and a MBA from Indiana Wesleyan University, Young has impressive credentials in many aspects of investing, retirement planning, and personal finance.

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