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Maximizing Your Federal Tax Refund

by John Mulloy, brightpeak financial

home

March 12, 2014

Maximizing Your Federal Tax Refund

Tax season is upon us and with it many questions of whether or not we’re “doing it right.” Deductions, credits, receipts, forms … you don’t need to be a tax attorney to know that it can sometimes get confusing. One of the most common questions is how to maximize your federal tax refund. Below, we’ve outlined one possible way to increase your tax refund, along with a link to a helpful tax prep guide. Who knows, soon you may even start to look forward to tax season.

One way for you to increase your tax refund or lower your tax liability is to take a look at your retirement plan. You may be eligible to receive up to a $1,000 tax credit ($2,000 if you are filing jointly) from the IRS if you’re making contributions to an eligible retirement plan.

When it comes to tax season, a lot of us feel like there’s so much we don’t know- like the fact that this tax credit exists. Knowing the ins and outs of the process can help us get what we can out of tax season. Eligible plans include traditional and Roth IRAs, your 401(K) plan at work, 403(b) annuities and a few other less common plans. The actual amount of your credit is dependent on your filing status, the retirement plan contribution amount, and your income.

Make sure you take advantage of this tax credit if you can, thereby providing an instant return that will turbo charge your retirement plan. Also, don’t forget that you have until April 15 to make contributions for the 2013 tax year, and of course, you can contribute now for 2014.

If you would like more information on how to maximize your tax refund, download the e-book, How to avoid common tax mistakes and maximize your refund.

Saver’s Tax Credit Income Limits (you do not qualify for the credit if your income is above these limits)

Filing Status

Income Maximum

Married filing jointly

$59,000

Head of household

$44,250

Single, married filing separately, or qualifying widow (er)

$29,500

For more information, see IRS Publication 590 or consult your tax adviser.


 

John Mulloy is not a tax advisor or expert. Please consult a financial professional to get specific questions answered on your own personal situation. brightpeak financial is a division of Thrivent Financial, a faith-based, not-for-profit founded more than a century ago, which is the issuer and underwriter for brightpeak financial products. Products not available in all states. Click here to learn more. Thrivent Financial for Lutherans, based in Appleton, WI 54919-0001.

Let's help each other out, what's the best tax tip you've heard? 

Related topics: Get organized, Finances, Advice

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