11 New ways to maximize your tax refund in 2019

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11 New ways to maximize your tax refund in 2019
11 New ways to maximize your tax refund in 2019

We all know that the new tax law went into the effect last year 2018. But did you know that due to the changes in the tax law in 2018, you may get a bigger tax refund in 2019?
According to the UBS analysis, the tax refund can increase from $42 billion to $66 billion than previous years. Banks in America have also forecasted that tax refund in 2019 can increase by 26% more than the last year. Thus, you may get a noticeable boost in your tax refund.
Though due to the Government shutdown, we were not sure when to file the tax return, later we came to know that the tax filing season began from 29th January onwards.
Like every year, you should get ready for the tax season now. But, before you get ready, you should be aware of some vital things regarding tax. Also, you should understand how to get a bigger tax refund since there is a prediction on it.

Things to remember while preparing for the tax season

1 The changes in tax law do not apply to 2017 tax return

People who didn’t file a tax return for their 2017 taxes should file the tax return within April 12 this year. But remember, the new tax law will not apply for your old tax return. The new tax law will apply only for 2018 tax return.

2 Consider e-filing and direct deposit to get the refund sooner

The IRS has encouraged people to file the tax online to make the tax refund process faster. They have also recommended people to choose the direct deposit method to get the tax refund fast. According to the IRS, the direct deposit system is "simple, safe and secure” option when it comes to transactions. The Govt. also prefers the direct deposit method for Social Security and Veterans Affairs Payment.

3 The newbie tax filers can consider e-filing

Though tax filing is a bit difficult thing, it becomes easier these days. People who are new in tax should consider e-filing to make it more hassle-free. As per the experts, novice tax filers can consider Turbotax and H&R Block to file their tax. If you are scared of filing the tax return, then you can visit a tax accountant for help.

4 File as early as possible to avoid fraudulent activity

As you all know that the fraudsters can use a stolen identity to file the tax refund. As per the IRS, most of the thieves steal the identity and request the tax refund to their address. They start this activity as soon as the official tax season starts. Your identity can be stolen if you don't stay cautious.
Thus, it is advisable to file the tax and request the tax refund as soon as possible. Also, if you believe that your identity has been already stolen by the tax fraudsters, you should report it to the Treasury Inspector General for Tax Administration.

Who will get a bigger tax refund this year?

Though the new tax law will boost the tax refund this year, but not everyone will get the benefit. USB did a detailed analysis of the effect of the new tax law. The global financial advice forum has claimed that the new tax law benefit is not set for all people in America. There are certain people will get the bigger tax benefit. Who are they?

Married filers with children can get a bigger tax refund

After analyzing the new tax rate and IRS withholding guidelines, the USB has found that, the married couples with 2 children filing jointly will get pretty boost in their tax refund than a single filer with standard deduction at various income levels. Married filers with 2 children who earn $40,000 a year and between $125,000- $400,000 will get bigger tax refund than previous years.

Why married joint filer with children will get the biggest tax benefit?

As per the USB analysis, due to the increase of the size of the child tax credit, married filers with children can expect a boost in their tax refund. Whereas single filers are not entitled to this benefit.

Which tax deductions are not available now?

You should understand which tax deductions and tax credits are not available in 2019. Below is the list of tax deductions that are not available until 2025 when a new President year will begin.

List of tax deductions that no longer exist. Changes as per the new tax law
Personal exemptions -
The standard $6,350 deduction. Now it’s increased to $12,000
Deductions for tax extenders -
Unrestricted casualty loss deduction -
A deduction for moving expenses -
Deductions for certain school donations -
An unrestricted deduction for home equity loan interest -
Unlimited state and local tax deductions -

New ways to maximize your tax refund in 2019

As per the tax experts, people should learn which tax breaks are available for them to maximize their tax refund. There are some ways to maximize your tax refund this year. Here are a few of them:

1 Mind your filing status

Your tax refund amount significantly depends on your filing status. Due to the new tax law, the married joint filers can get a bigger refund than single filers. Thus, if you are married, you should file jointly. If you file separately, you will miss some key tax credits. For example, the new tax law allows the US household to claim a deduction of up to 35% (Up to $3,000) on daycare costs for kids under the age of 13.

2 Married couples with huge medical and business expenses should file separately

Filing separately makes sense when you or your spouse have paid huge medical bills. If you had to spend huge for business expenses, then you should also file separately to get the big tax refund.

3 Take the advantage of Dependent Care Credit

People who are the head of the household can get the Dependent Care Credit. They can get the deduction for senior parents or an incapacitated spouse or dependent. They can also get the deduction up to $6,000 for two or more family dependents. Remember, head of the household is eligible to get a larger standard deduction.

4 Get the Child tax credit

The federal child tax credit allows a tax break of up to $2,000 for parents. If you have a non-child dependant, you can get tax refund up to $500.

5 Grab the retirement plan tax deductions

If you are contributing money on a company-sponsored plan 401(K), then you can get deductions up to $18,500. You will get the same deduction on a self-employed 401(k) plan.
People who are above 50 are entitled to get an additional $6,000 in 401(k) funds. Individual retirement accounts are also entitled to the deduction depending on the income status and the amount of cash a spouse has stashed away in a 401(k) plan. For 2018 tax filers who are 50 and older, the IRA contribution limit is $5,500, or $6,500.

6 Get a bigger tax depending on the number of children in the household

You can get the earned income tax credit up to $6,431 depending on the number of children in your household.

7 Get advantage of the Health Savings Account tax break

If you have a Health Savings Account, then you can deduct up to $3,450 for individual contributions or $6,900 for family-level contribution.

Remember, the tax situation can change with time. For example, if you buy a home or start your family, then there will be certain changes in your tax filing. Tax filing can be overwhelming for you; so you can seek help from a good accountant. Try to review your W-4 tax withholding form as early as possible to get the refund early. Remember, you will get the tax refund within the 21 days of filing online. If you want to know the tax refund status, you can use the IRS return-tracking service (available for 24x7) after filing your tax return online or 4 weeks after mailing the return.

Last Updated on: Wed, 27 Feb 2019

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