An accountant can improve your tax rebate this season.

Having to do taxes on your own can be difficult, leaving you prone to mistakes and errors. However, with the help of an accountant, you can improve your tax rebate using tactics you otherwise may not have known about.

We’ve outlined some of these methods below with an explanation of how an accountant can use them to improve your return.

Suggest Contributions to Retirement

One of the main ways an accountant can help you improve your tax return is to suggest contributions to a retirement savings plan. Not only will this suggestion help you in the future by setting aside money for when you are no longer working, but it can slash your tax bill.

You are able to contribute up to $19,000 to a 401(k) and up to $6,000 to an IRA. Plus, if you maximize your contributions for the year you may be able to reduce your taxable income by $25,000 or $32,000 if your over 50, which could translate (if you’re in the 24% tax bracket) to a $6,000 to $7,680 savings.

Tax Loss Harvesting

An accountant will also have a look at any investment losses you have suffered over the year. An accountant may suggest you sell them to harvest your losses by offsetting the taxes on investment gains and reducing your taxable income.

This can be a helpful strategy if your income for the year is expected to be higher than normal and you want to avoid filing in a higher tax bracket.

Offer Alternative Investments

If you have a high deductible health plan, you may be eligible to invest in a health savings account. Further, if you have self-only coverage, you should be eligible to invest in an HSA if you have a deductible of at least $1,350. If you have family coverage, you may be eligible if your deductible is at least $2,700.

If you fall in either of these categories you’re allowed to contribute between $3,500 to $7,000. Meaning, you could reduce your taxable income by $3,500 or $7,000 if you max out your contributions. This money can then be maxed out tax-free to cover healthcare costs, or if it’s not used over your lifetime it can be withdrawn after age 65 and taxed as ordinary income.

Monitor Medical Costs

It can be difficult to file, monitor and save all of your medical costs and expenses. That’s why it’s important to use a reliable accountant who can save you countless hours of having to organize it on your own.

Keeping track of these costs is not only daunting but important because you may be eligible to take a deductible on the funds you’ve spent. In 2019, you can now deduct unreimbursed medical expenses only if they exceed 10% of your income.

Keep in mind to qualify for this reimbursement you will need to provide an itemized list to claim the money which will be easier with an accountant.

Flexible Spending Plans

An accountant may also suggest you take advantage of a flexible spending plan if your workplace offers one. That’s because, you can contribute to an FSA with pre-tax funds to pay qualifying out-of-pocket medical expenses, or services such as child and disability care.

You will need to be aware of the rules when contributing to an FSA, which states that you can only enroll in one during an open enrollment period with your employer and maybe structured where if you don’t spend your contributions, you will lose them.

However, if you know you will have out-of-pocket medical costs or dependent care expenses, you should consider putting some money into this type of account to reduce your taxable income and make these expenses relatively less.

Ultimately, having to navigate tax deductibles can be a time consuming and confusing process. But, with the help of an accountant, you may be able to improve your rebate to save money this year. If you need help with your rebate, get in touch with a member of our team today.

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