How can I maximize my tax return?

Question

So I am trying to figure out this whole "deductions" thing. Does it mean for instance I pay roughly $3,700 a year in taxes. This year i have donated about $2,000 worth of stuff to goodwill due to a move. I have over 10,000 in medical bill payments. And a few other things that determined a deduction I moved 3000 miles to take a new job. So if I paid $3700 in taxes and have $12,000 in deductions does that mean I am guaranteed by the IRS to get all of my $3700 back that I have paid them? I went to a tax services website H & R block and typed in some hypothetical numbers and when I choose to itemize to show my deductions my return was almost $1000 less than if I used the Standard Deduction why is that?
Thanks in advance for your answers!

Answer 1

You don't give enough information to answer all of your questions. Your $10k in medical bills may or may not be deductible - it depends upon your AGI. Your medical deductions are anything greater than 7.5% of your AGI. Your moving expenses for a new job aren't a deduction, they go on line 26 of the Form 1040, if they qualify. You don't have $12k in deductions if you are counting medical expenses and charitable contributions. The best thing for you to determine if your itemized deductions exceed your standard deduction is to fill out Schedule A of the 1040 and follow the instructions. It's not that hard. You won't get all of your money back - you paid social security and medicare and you won't get any of that back until your retire.

Answer 2

You do not say what your filing status is, so it is hard to give you numbers. However, the Standard Deduction is usually better if you don't have a mortgage or pay property taxes. If you did, did you include them in the calculation? Remember medical bills are only deductible to the extent that they are more than 7.5% of your Adjusted Gross Income (the figure at the very bottom of page 1 on the 1040). As for moving expenses, these are "above the line" deductions. You can deduct them and it does not matter whether you itemize or take the standard deduction.

Answer 3

Deductions reduce your taxable income. They do not directly reduce your tax liability. If the total of you itemized deductions is less than the standard deduction, you should use the standard deduction. You can't claim both itemized deductions and the standard deduction. Medical expenses are only deductible to the extent that they exceed 7.5% of your AGI (adjusted gross income). That is the last line on the first page of the Form 1040. Depending on who paid your moving expenses, you may or may not be able to claim a deduction for that.

Answer 4

And you do have to sign the completed tax return where the below statement is included for your use at this time in your life. Under penalties of perjury, I declare that I have examined this return, and to the best of my knowledge and belief, it is true, correct, and accurately lists all amounts and sources of income I received during the tax year. Your signature Date Your occupation And when you do make your final decision about this matter just make sure that very good written proof is available to be used IF and WHEN the IRS might decide that they would want to verify the information that was submitted to them on the 2011 income tax return for this purpose. And this is your main home primary residence that you are maintaining where all 4 individuals live for all of the tax year 2011 RIGHT and you do have twice as much income RIGHT. Hope that you find the above enclosed information useful. 12/23/2011

Answer 5

Standard deductions are based on statistical averages and normal behavior. Your move and level of giving mean that it is probably better to itemize your deductions.

It is unlikely that you will get all of your tax refunded but you should itemize.

Answer 6

Ask a friend who they use for a CPA.

I use one, and it costs me less than turbo tax, they make fewer mistakes, and they advise me on ways to maximize my savings, or tax avoidance.