As tax season approaches, many individuals are preparing for their filings, and some are discovering that they may receive higher-than-expected refunds this year. While the official tax deadline is still a few months away, taxpayers are encouraged to familiarize themselves with new changes that could positively impact their returns.
At Liberty Tax on Laskey Road in Toledo, tax professionals are reporting an increase in refund amounts compared to last year. Notably, a recent proclamation from the Vice President of the United States hinted at this year potentially seeing the largest refund amounts in U.S. history. One contributing factor to this trend is the reduction of taxation on overtime pay. Taxpayers can file for deductions on premium pay; specifically, if their overtime is billed at time and a half, the additional half is exempt from taxes. This information can be found on the last pay stub of the taxpayer, making it essential for individuals to keep accurate records.
Dave Gang from Liberty Tax emphasized the importance of verifying refund calculations against one’s final paycheck stub, as discrepancies can arise from varied methods of calculation. He added that people should also consider deducting tips if these amounts are reported on their W-2 forms. However, cash tips require documentation to be eligible for deductions.
Another significant revision this year includes an increased deduction available for seniors over the age of 65, which can be added to the standard deduction, potentially leading to substantial savings. Gang noted that many senior clients have experienced considerable benefits from this change already, indicating a noticeable immediate impact.
Additionally, interest paid on newer vehicles can also be deducted, contributing to an overall positive outlook for taxpayers. As the April 15 deadline approaches, experts advise individuals to review their unique situations carefully.
Tax situations can vary widely, and what benefits one person may not apply to another. Therefore, it’s prudent for taxpayers to explore all options and deductions available to them, particularly with the presence of new programs and exemptions this year.
In summary, as tax season gears up, understanding the latest changes and maximizing deductions can help many taxpayers capitalize on higher refunds. Individuals are encouraged to gather their documentation and consider consulting with tax professionals to ensure they make the most of the current tax laws.
