Tax returns?

Question

Does anybody know good ways to get a larger tax refund. I'm not married and rent a house with my g/f, we have no kids. I know somebody in the same income bracket as me (30-40k) and he has a friend that does his taxes online. He gets lots of money back and I only get a couple hundred dollars. We both claim 1 on our W-2's

Answer 1

A couple of possibilities could be:
1) your friend is having more withheld (in this case he may be paying the same amount of taxes as you pay, but his refund is larger because he paid much more in during the year)
2) your friend has itemized deductions you don't. Some of the common itemized deductions are mortgage interest, charitable contributions, property taxes, some business expenses, and some other taxes paid (state taxes, etc.). If these deductions exceed the standard deduction, your friend could increase his refund by a pretty substantial amount.

Answer 2

There are probably things about the "friends" return that you do not know (ie. children, home mortgage, education credits, withholding, etc). There are no super secrets. The "friend" probably has a very different return than you.

Besides, getting a large refund at tax time means you lent money to the government all year interest free. Psychologically, it is nice to get a big refund but it is not the smartest thing fiscally.

On the record, I haven't gotten a refund in years and I plan it that way.

Answer 3

just because your friend gets a larger tax refund than you doesnt mean hes filing a correct tax return. some people claim lots of miscellaneous employee expenses that are not reimbursed when in fact they are made up. i had a friend who always deducted his dry cleaning bills, when in fact they arent deductible (he worked for merrill lynch). people also tend to make up giving alot of charitable donations. people with their own business file a schedule C, and also tend to deduct many bogus expenses in order to claim a net loss.

the only way youre going to get a larger tax refund is if you invest in real estate, pay taxes and mortgage interest, or if you get married and have children.

tip: try selling any stock that you are currently losing money on. this can reduce your income up to $3000.

if you dont already have a 401(k) plan, invest in an IRA

donate old computer equipment or a car. this can create bigger, valid deductions

Answer 4

It sounds like you friend needs to get a financial advisor. He is loaning all of that money to the governmanet interest free and they don't even send a thank you. You sound like you are paying your withholding much more effeciently.
You should be taking some of your take home pay and put it in an investment account rather than spending it all.

Answer 5

THEY PROBABLY HAVE MORE ITEMIZED DEDUCTIONS THAN YOU. MAYBE YOU SHOULD BUY A HOUSE OR CONDO. SO YOU CAN ITEMIZE AND GET MORE BACK. YOU NEED TO TALK TO A TAX PREPARER AND GIVE WAY MORE INFO ON YOUR SITUATION. EVERY PERSON'S RETURN IS DIFFERENT EVEN IF THEY LOOK SIMILAR ON THE SURFACE. ALSO YOU NEVER KNOW YOUR FRIEND MAYBE FUDGING HIS/HER RETURN TO GET MORE BACK.