How to Avoid Overpaying Uncle Sam in Taxes -

Are you giving too much of your hard-earned money to Uncle Sam? Last year, 109 million taxpayers overpaid on their taxes, and the Internal Revenue Service doled out more than $305 billion in refunds that averaged more than $2,700 each. “First of all, I think it’s in our nature that we like refunds,” said Tom Wheelwright, CEO and founder of CPA firm ProVision. “I think that’s one reason [taxpayers] overpay their withholding, is because they’re planning on that. It’s forced savings for them.” Getting a lump sum back after you file your taxes is better than paying, but perhaps not if you’re struggling month-to-month to make ends meet. Wheelwright said instead of just cutting costs, consider cutting the amount you’re giving the government through your paycheck. “The reality is if you want to put more cash in your pocket, the easiest and fastest way to do that is to reduce your taxes,” he said.

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Tax Tip: How to Choose Between the Standard Deduction or Itemizing -

When filing your tax return, is it better to take the standard deduction, or to itemize? “I would hope that most people itemize,” said Tom Wheelwright, founder of the CPA firm ProVision. “My guess is a lot of people take the standard deduction.” “It’s a really easy calculation, though, because you add up your itemized deductions and if they’re more than your standard deduction, you take itemized deductions,” he added. Wheelwright’s guess is right: More than 60 percent of taxpayers take the standard deduction. But why? “Most people don’t itemize, particularly young people just starting jobs. They don’t have enough qualified expenses to itemize, so they take the standard deduction,” explains Kevin McCormally, of Kiplinger’s Personal Finance magazine. If you own a home, however, that unlocks the door for itemizing. “Once you can claim your homeowners insurance and mortgage deduction, you can also itemize your charitable deductions, the medical expenses if you had a lot, personal property tax on your car,” said Kathy Pickering, executive director of the Tax Institute at H&R Block.

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