how to get a big tax refund with no dependents

how to get a big tax refund with no dependents

How to Get a Bigger Tax Return While Filing as a Single With No Dependents

Changes in the U.S. economy force many taxpayers to look for ways to reduce their tax liability and, as a bonus, receive a larger tax refund check from Uncle Sam. Single, unmarried, tax filers without dependents are the hardest hit by income taxes because they don't have dependents they can claim as exemptions. Without a spouse, children or other dependents, single taxpayers also don't have many of the options that married couples or parents have for reducing taxable income through education savings, dependent care or the earned income credit. Nevertheless, a few adjustments throughout the tax year might result in a windfall in your next refund check from the Internal Revenue Service.

Review tax regulations, current income tax legislation and time-sensitive deductions to learn more about deductions and credits to which you might be entitled. For example, time-sensitive deductions and credits could include purchasing energy-efficient home improvement products such as windows or appliances. The IRS website and the U.S. government-sponsored Energy Star websites contain numerous publications that explain energy-efficient ratings and what purchases apply towards a tax credit.

Reduce your taxable income while keeping your withholding and number of exemptions steady. For example, increasing your contributions to your employer-sponsored 401(k) plan can significantly reduce your taxable income because your employer deducts contributions from your gross wages. Your payroll department then bases its tax computation on the amount remaining after it takes out your 401(k) contribution. Your company's benefits specialist can provide guidance on what impact an increased contribution level will have on your taxable income and your take-home pay.

Purge your closets, basement and garage of unwanted items on a regular basis and maintain detailed records for donating them to charities. Every calendar quarter, gather items you no longer use or don't want, calculate the value and drop off the items at your favorite charity. You also can give them to a secondhand store that will give you a receipt for deducting the value as non-cash charitable donations -- stores operated by disabled veterans associations and the Salvation Army are your best bets. Invest in a software program for calculating and cataloging your donations. Many programs are simple to use and can extract data you input and format it so that it's compatible with online income tax filing software and IRS regulations.

Review your files for deductions you may have overlooked. Check your mortgage statements for interest payments you made every month -- these usually add up to an amount that can substantially reduce your taxable income. Obtain records for real estate and property tax payments to determine whether they are allowable as deductions.

How to Get a Bigger Tax Return While Filing as a Single With No Dependents

Keeping up to date with changes in tax laws will help you pay the least amount of taxes.

If you are not legally married as of the last day of the year and you don't have any dependents, you have one option when it comes to filing your federal income tax return: You are single for tax purposes. While Uncle Sam is going to take his fair share from your paycheck, there are ways to get a bigger refund check when tax time rolls around.

Adjust your withholding. When you went to work you probably had to fill out a Form W-4. This little form tells your boss how much money to withhold from your paycheck for stuff like federal income taxes, Social Security and Medicare. One easy way to ensure a fatter tax refund check is to have more money withheld from each paycheck. There are a couple of ways to make adjustments. Check the Single status in Box 3 and reduce the number of allowances you claim in Box 5. Claiming Single with 0 allowances will cause your boss to withhold at the highest rate. If you need more money taken out, you can designate a specific amount in Box 6. Sign and date your W-4 and turn it in. Check your paycheck to make sure your changes take affect.

Figure your federal tax return using both the standard deduction and itemized deductions, then file your return using the method that gives you the lowest tax obligation. The standard deduction method is easier to figure. If you're single your standard deduction for the 2012 tax year is $5,950. If your itemized deductions add up to more than $5,950 your taxable income goes down and your tax return goes up. Keep track of your deductible expenses, such as mortgage interest, charitable contributions and unreimbursed employee business expenses. Even small deductions can add up over the course of a year.

Fully fund your qualified retirement accounts, including your traditional individual retirement account, and take advantage of pre-tax benefits programs at work. Every dollar that goes into a pre-tax benefit program, such as a flexible spending account, is a dollar on which you don't have to pay taxes. Not only are you paying taxes on a lesser amount of money, but it might even drop you into a lower tax bracket. The less money you pay in taxes, the bigger your tax refund check will be.

How to get a bigger tax refund in 2017

Tax season is around the corner, which isn't welcome news to many people. It should be, though, as roughly 80% of the nearly 150 million individual tax returns processed by the IRS end up with a tax refund, the average size of which is roughly $3,000. Better still, there are things you can do to get a bigger tax refund -- in 2017 and beyond.

Here are a handful of ways to get a bigger tax refund. See if any of them might work for you.

One way to boost your tax refund is by taking lots of deductions. Taking the standard deduction is easier, but you might be able to save money by itemizing your deductions. If you don't really have enough in deductions to make that worth it, see if there are any deductible expenses you can move forward from 2017 to 2016. For example, if you've been planning to donate to some charities in the next few months, doing so in December can have them count for tax year 2016. (You can also donate household items and clothing to charity.) If you know you have qualified medical expenses such as Lasik surgery or lab work coming up, you might try to move them up to December, too. Read up on deductions as there are many that might apply to you, such as expenses related to moving for a new job.

Interest rates seem more likely to rise than fall these days, so take some time to see whether it makes any sense to refinance your mortgage. Most of your monthly payment goes toward interest in the first years of a mortgage, and that interest is deductible. Don't just refinance for the tax break, but refinancing could be smart if you get a meaningfully lower interest rate (one rule of thumb suggests only refinancing if you can get a rate that's at least one percentage point lower) or if you switch into a loan that serves you better, such as a 15-year mortgage.

The 1040 family of tax forms is for federal income tax and is absolutely essential for all.

The 1040EZ form is the simplest version and is typically filed by those who:

  • Have no dependents
  • Are younger than 65
  • Earned less than $100,000
  • Don’t plan to itemize deductions

Form 1040A is more comprehensive than 1040EZ, but simpler than the regular 1040. It's beneficial for those who earn less than $100,000 and don’t have self-employment income -- but who want to make adjustments to their taxable income, such as child tax credits or deductions for student-loan interest. Note that it doesn't allow for itemized deductions.

Form 1040 is filled out by those who make $100,000 or more, have self-employment income or plan to itemize deductions.

The 1099 series is reports all income that isn’t salary, wages or tips, and must be reported on both the state and federal level.

1099-DIV reports dividends, distributions, capital gains and federal income tax withheld from investment accounts, including mutual fund accounts.

1099-INT trakcs interest income earned on investments.

1099-OID (Original Issue Discount) is provided if you received more than the stated redemption price on maturing bonds.

1099-MISC documents self-employment earnings, as well as miscellaneous income such as royalties, commissions or rents. It covers all non-employee income that is not derived from investments.

Most of us need to contribute to retirement accounts, and if we contribute to a traditional (not Roth) IRA and/or 401(k), we get to deduct that sum from our taxable income, shrinking our tax bill and making our refund bigger. It's a no-lose proposition. Still, it might be even better to contribute to a Roth IRA or Roth 401(k) instead. They won't give you any upfront tax break and won't enlarge your refund, but they do offer the promise of withdrawals in retirement that are tax-free. That's well worth considering.

Claim fewer allowances on your W-4 form

We all fill out W-4 forms when we first start a job. However many allowances you claim determine the amount withheld from your paycheck for taxes. The more you claim, the less will be withheld. There's a worksheet with the W-4 form that helps you determine how many to claim, including taking one each for yourself, your spouse, and qualifying dependents. You can add allowances if you work more than one job, have a spouse who works, and have significant child and dependent care expenses. You get to choose how many allowances to claim and you can update your W-4 form any time, so claim more if you want a fatter refund check by submitting a new W-4 form to your payroll department.

Choose the correct filing status

Your filing status influences the size of your tax refund, too. Don't assume that just because you're unmarried that you should file with the "single" filing status. If you're a single parent or support a dependent, you may qualify for the "head of household" status, which offers more favorable tax rates and a significantly higher standard deduction. (For 2016, for example, the standard deduction for singles and married folks filing separately is $6,300, but it's $9,300 for heads of households.) Meanwhile, if you're married, run the numbers to see whether you're better off filing jointly or separately. Filing jointly is more likely to result in a bigger refund, but everyone's situation is different. Filing separately can make sense if one spouse has high medical expenses or if the marriage is rocky.

Take the Earned Income Tax Credit (EITC)

If you earn relatively little, the EITC can shrink your tax bill and boost your refund considerably. For the tax year 2016, the maximum credit is $6,269, and the average credit that qualifying folks take has recently been around $2,400. The EITC is very powerful but underused. Look into it to see if you can take advantage of it.

Finally, consider hiring a tax pro to prepare your return and offer strategies to you. Yes, it will cost some money -- possibly a few hundred dollars for a good pro -- but you may well reap much more than that in tax savings and a bigger refund. A good tax pro will be up on the latest tax-law changes and will know far more about the tax code than you do. Don't just hire anyone, though. Ask around for recommendations. Consider hiring an "Enrolled Agent," a tax pro licensed by the IRS who is authorized to represent you before the IRS if need be. You might find one through the National Association of Enrolled Agents website.

Any or all of the above can work to boost your tax refund, but a big refund isn't necessarily to be celebrated. It might seem like you're receiving a bonus, a windfall, or even a gift from the government, but a refund actually means that you overpaid your taxes due during the course of the year, making funds available for Uncle Sam to use that were not available for you to use. A shrunken tax bill, though, achievable with some of the strategies above, is something to celebrate.

The $15,834 Social Security bonus most retirees completely overlook

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Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, owns no shares of any company mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Rules for Claiming a Dependent on Your Tax Return

Updated for Tax Year 2017

Claiming dependents can help you save thousands of dollars on your taxes. Yet many of us are not aware of who in our family may qualify as our dependent. Review the rules for claiming dependents here for a qualifying child or relative.

The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018 deadline, including a few retroactive changes due to the passing of tax reform. Some tax information below will change next year for your 2018 taxes, but won’t impact you this year. Learn more about tax reform here.

Having trouble deciding if your Uncle Jack, Grandma Betty or daughter Joan qualifies as a dependent? Here's a cheat sheet to quickly assess which of your family members you can claim on your tax return.

Why claim someone as a dependent?

If you have a family, you need to know how the IRS defines “dependents” for income tax purposes. Why? Because it could save you thousands of dollars on your taxes. For every qualified dependent you claim, you reduce your 2017 taxable income by $4,050. This can add up to substantial savings on your tax bill.

Dependent rules also apply to other benefits, such as tax credits. Many of these credits are available only if you have qualified dependents. For example, both the child tax credit and the earned-income tax credit rely on these rules.

In addition, the rules help you determine if you can write off dependent daycare expenses, medical expenses, various itemized deductions and most tax credits that involve children or family issues. Qualifying for these benefits can spell the difference between owing money and receiving a refund.

The basic rules aren’t complicated. But it can be difficult to apply those rules to certain family situations. That’s especially true if you have a son off at college, a cousin who stays with you during the summer, or a daughter with a part-time job. The checklist below will help you decide which relatives you can claim as dependents.

The IRS rules for qualifying dependents cover just about every conceivable situation, from housekeepers to emancipated offspring.

Fortunately, most of us live simpler lives. The basic rules will cover almost everyone. Here’s how it all breaks down.

There are two types of dependents, each subject to different rules:

For both types of dependents, you’ll need to answer the following questions to determine if you can claim them.

  • Are they a citizen or resident? The person must be a U.S. citizen, a U.S. national, a U.S. resident, or a resident of Canada or Mexico. Many people wonder if they can claim a foreign-exchange student who temporarily lives with them. The answer is maybe, but only if they meet this requirement.
  • Are you the only person claiming them as a dependent? You can’t claim someone who takes a personal exemption for himself or claims another dependent on his own tax form.
  • Are they filing a joint return? You cannot claim someone who is married and files a joint tax return. Say you support your married teenaged son: If he files a joint return with his spouse, you can’t claim him as a dependent.

In addition to the qualifications above, to claim an exemption for your child, you must be able to answer "yes" to all of the following questions.

  • Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half brother, half sister, stepbrother, stepsister, adopted child or an offspring of any of them.
  • Do they meet the age requirement? Your child must be under age 19 or, if a full-time student, under age 24. There is no age limit if your child is permanently and totally disabled.
  • Do they live with you? Your child must live with you for more than half the year, but several exceptions apply.
  • Do you financially support them? Your child may have a job, but that job cannot provide more than half of her support.
  • Are you the only person claiming them? This requirement commonly applies to children of divorced parents. Here you must use the “tie breaker rules,” which are found in IRS Publication 501. These rules establish income, parentage and residency requirements for claiming a child.

Many people provide support to their aging parents. But just because you mail your 78-year-old mother a check every once in a while doesn’t mean you can claim her as a dependent. Here is a checklist for determining whether your mom (or other relative) qualifies.

  • Do they live with you? Your relative must live at your residence all year or be on the list of “relatives who do not live with you” in Publication 501. About 30 types of relatives are on this list.
  • Do they make less than$4,050 in 2017? Your relative cannot have a gross income of more than $4,050 in 2017 and be claimed by you as a dependent.
  • Do you financially support them? You must provide more than half of your relative’s total support each year.
  • Are you the only person claiming them? This means you can’t claim the same person twice, once as a qualifying relative and again as a qualifying child. It also means you can’t claim a relative—say a cousin—if someone else, such as his parents, also claim him.

The deduction for qualified dependents is one of the best tax benefits available. It can open the door to a large number of tax credits and deductions that can lower your tax bill. TurboTax will ask you simple, plain-English questions about your family and will determine for you who qualifies as a dependent on your tax return, so you can be sure you’re getting the biggest refund you deserve.

  • Can I claim my child as a dependent if she has a part-time job?

Yes, if you provide more than half of the child’s support and meet other criteria.

  • My son will be filing a tax return for his summer job. Can he take the personal exemption if I claim him as a dependent?

    No. If you claim an exemption for him on your return, he will not be able to take a personal exemption.

  • I support my 67-year-old sister-in-law. Is she qualified to be counted as a dependent on my tax return?

    Yes, because sisters-in-law meet the relationship requirement and there is no age limit for qualifying relatives.

  • Get every deduction

    TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

    How to Get a Bigger Tax Refund in 2017

    Tax season is around the corner, which isn’t welcome news to many people. It should be, though, as roughly 80% of the nearly 150 million individual tax returns processed by the IRS end up with a tax refund, the average size of which is roughly $3,000. Better still, there are things you can do to get a bigger tax refund — in 2017 and beyond.

    Here are a handful of ways to get a bigger tax refund. See if any of them might work for you.

    One way to boost your tax refund is by taking lots of deductions. Taking the standard deduction is easier, but you might be able to save money by itemizing your deductions. If you don’t really have enough in deductions to make that worth it, see if there are any deductible expenses you can move forward from 2017 to 2016. For example, if you’ve been planning to donate to some charities in the next few months, doing so in December can have them count for tax year 2016. (You can also donate household items and clothing to charity.) If you know you have qualified medical expenses such as Lasik surgery or lab work coming up, you might try to move them up to December, too. Read up on deductions as there are many that might apply to you, such as expenses related to moving for a new job.

    Interest rates seem more likely to rise than fall these days, so take some time to see whether it makes any sense to refinance your mortgage. Most of your monthly payment goes toward interest in the first years of a mortgage, and that interest is deductible. Don’t just refinance for the tax break, but refinancing could be smart if you get a meaningfully lower interest rate (one rule of thumb suggests only refinancing if you can get a rate that’s at least one percentage point lower) or if you switch into a loan that serves you better, such as a 15-year mortgage.

    Most of us need to contribute to retirement accounts, and if we contribute to a traditional (not Roth) IRA and/or 401(k), we get to deduct that sum from our taxable income, shrinking our tax bill and making our refund bigger. It’s a no-lose proposition. Still, it might be even better to contribute to a Roth IRA or Roth 401(k) instead. They won’t give you any upfront tax break and won’t enlarge your refund, but they do offer the promise of withdrawals in retirement that are tax-free. That’s well worth considering.

    Claim fewer allowances on your W-4 form

    We all fill out W-4 forms when we first start a job. However many allowances you claim determine the amount withheld from your paycheck for taxes. The more you claim, the less will be withheld. There’s a worksheet with the W-4 form that helps you determine how many to claim, including taking one each for yourself, your spouse, and qualifying dependents. You can add allowances if you work more than one job, have a spouse who works, and have significant child and dependent care expenses. You get to choose how many allowances to claim and you can update your W-4 form any time, so claim more if you want a fatter refund check by submitting a new W-4 form to your payroll department.

    Choose the correct filing status

    Your filing status influences the size of your tax refund, too. Don’t assume that just because you’re unmarried that you should file with the “single” filing status. If you’re a single parent or support a dependent, you may qualify for the “head of household” status, which offers more favorable tax rates and a significantly higher standard deduction. (For 2016, for example, the standard deduction for singles and married folks filing separately is $6,300, but it’s $9,300 for heads of households.) Meanwhile, if you’re married, run the numbers to see whether you’re better off filing jointly or separately. Filing jointly is more likely to result in a bigger refund, but everyone’s situation is different. Filing separately can make sense if one spouse has high medical expenses or if the marriage is rocky.

    Take the Earned Income Tax Credit (EITC)

    If you earn relatively little, the EITC can shrink your tax bill and boost your refund considerably. For the tax year 2016, the maximum credit is $6,269, and the average credit that qualifying folks take has recently been around $2,400. The EITC is very powerful but underused. Look into it to see if you can take advantage of it.

    Finally, consider hiring a tax pro to prepare your return and offer strategies to you. Yes, it will cost some money — possibly a few hundred dollars for a good pro — but you may well reap much more than that in tax savings and a bigger refund. A good tax pro will be up on the latest tax-law changes and will know far more about the tax code than you do. Don’t just hire anyone, though. Ask around for recommendations. Consider hiring an “Enrolled Agent,” a tax pro licensed by the IRS who is authorized to represent you before the IRS if need be. You might find one through the National Association of Enrolled Agents website.

    Any or all of the above can work to boost your tax refund, but a big refund isn’t necessarily to be celebrated. It might seem like you’re receiving a bonus, a windfall, or even a gift from the government, but a refund actually means that you overpaid your taxes due during the course of the year, making funds available for Uncle Sam to use that were not available for you to use. A shrunken tax bill, though, achievable with some of the strategies above, is something to celebrate.

    Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, owns no shares of any company mentioned in this article. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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