How to boost your tax refund

Sponsored StoryMAXIMIZE YOUR TAX REFUND (5:53)

The good news about taxes this year is that many taxpayers can expect some increase in their tax refunds, thanks to several new tax deductions and changes to some tax credits. Miguel Burgos, CPA and TurboTax expert, offers some tips to help you get the money that’s rightfully yours. Watch the video above or read the full transcript below.

Related:Tax time: Tips for getting started and finishing your tax return

Maximize your tax refund

Video transcript:

[MUSIC PLAYING] 

TRACY BYRNES: All right. Tax season is upon us. And while most people dread it, the good news is, a lot of people get refunds, which is a really cool thing, maybe even more of a refund this year, depending on what goes on with that ‘One Big Beautiful Bill’ Act. 

Miguel Burgos, CPA and TurboTax expert, is here to help us figure this all out. Look, Miguel, a lot of people got refunds this last year. Do they expect to do the same this year? 

MIGUEL BURGOS: Yes, well, what we expect as tax professionals, and looking at the new deductions, and some of the changes in the credits, we do expect that, on average, many taxpayers should see an increase on their refund. Now, for this to happen, for taxpayers to be able to boost and maximize their refund as much as possible, we have to keep in mind several things. 

And some of them are: start as soon as possible to be able to maximize your refund. Also, another best practice is, make sure that you have on hand your prior year’s tax return. And also, see how you can leverage things like tax software to be able to have that prior year tax return on hand or to be able to upload that into your software. 

TRACY BYRNES: Yeah, this is great stuff. And all I’m thinking is: patience to get it right. That’s what it sounds like here, right? So let’s go back to gathering the documents because, as we, you and I alluded to in a previous video, there’s a lot of new stuff this year, so people might need documents that they didn’t need before, right? 

MIGUEL BURGOS: Yes. And that’s why so much emphasis on starting as early as possible. Don’t wait until the last week or the last day to start working on your taxes. You have to gather your documents. 

And it happens very often that you think you have all your documents or your personal information. You start working on your taxes, or you go to your tax professional, and then you realize, “Well, we have four new deductions this year with Schedule 1A. And I may qualify for maybe one or two of those.” 

And for example, this year, with no tax on tips or no tax on overtime, you may realize, “I need extra documents.” So you need to have extra time or enough time to be able to go back and gather that extra documentation. 

Also, with tax law and changes in the tax law, it is important for the taxpayers to understand not just, Here’s the paperwork, where do I sign? We really want people to understand where the numbers are coming from so they can make an informed decision. And that will equip them, not just for the current year, for the future. 

Next year, what kind of documents do I need? And if they do that, they’ll be able to maximize their refund and make sure that they don’t miss on any tax break or any tax credit. 

TRACY BYRNES: Right, like no tax on tips is somewhat misleading because your tips are taxable, but now you get a deduction. And to your point, you might have to figure out, are they pooled tips? Are they my tips? What kind of tips are they? 

And that that’s going to take people some time to go figure out, hence, the starting early. You also mentioned getting out last year’s tax return. Why do I need that? 

MIGUEL BURGOS: This is one of the best practices. It helps with tax accuracy because there are elements on the return that go from one year to the other. But it also helps to maximize a taxpayer’s refund. And I’ll give you multiple examples. 

You can just contrast. See, what deductions and credits did I claim last year that I could potentially also claim this year? That also applies in a very significant way to taxpayers that are self-employed and have a business. They can see what deductions and expenses I had on my business that I could potentially claim this year or some of them, like depreciation, can continue to claim on. 

Also, a big tax break are carryovers, like a capital loss. Perhaps you had capital losses that had a cap, and you were not able to claim all of them in the prior year. But you can continue to claim those this year. So by having your prior year return, it helps to maintain accuracy, but it also helps to maximize your refund as much as possible and to boost that potential refund. 

TRACY BYRNES: Yeah, because we forget about these things. And your tax return, I feel like, falls in the short term memory part of your brain. Once it’s done, you forget all about it, which is why, sometimes, being able to use software or online products actually is helpful because they remember sometimes more than we do, right? 

MIGUEL BURGOS: Yes, when it comes to boosting or maximizing your refund– and also, I just gave an example on one way to do that, which is having on hand your prior year return. A tax software can be very useful. 

For example, we can mention TurboTax. If you used the software last year, the software will already have your tax information and your prior year return, so you can easily contrast, what did I claim last year? What did I report last year versus what am I claiming and reporting this year? And it helps to make sense out of your taxes and understand them better. 

Also, even if you didn’t use that same software, where you can easily upload a PDF file with your tax-year return. And with the use of technology, you’ll be able to see, on every section of the return and of the software, what was that the same amount of deduction or credit claim last year versus how much it is this year? So it leads into informed decisions, understanding. 

When you understand, you feel better as a taxpayer. But also, you know that you are boosting your refund as much as possible. 

TRACY BYRNES: Yeah, I mean, uploading brokerage statements is huge, right? Knowing what your charitable deduction was last year versus this year, and if there’s a dramatic difference– does that cause a red flag? These are all really important things that taxpayers need to pay attention to. 

And they need both help, sometimes, from online and last year’s tax return. Miguel, this is great stuff. Thank you so much for breaking it down for us. 

MIGUEL BURGOS: Oh, it’s always a pleasure. And we’re here to help the taxpayers. 

[MUSIC PLAYING]

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