Top 5 Aspects Or Situations
That Demand A Tax Refund
Tax Deductions
Tax deductions work on reducing your taxable income. This in turn,
significantly affects your total tax liability. When the total deductions that
you have claimed exceed your taxable income, you can expect a tax refund.
Deductions can be of many types. For instance, deductions like state and
local taxes, mortgage interest, medical expenses, etc., can impact your
taxable income.
Changes In Filing Status
Situations like major life events that cause a change in the filing status of
taxes also affect your share of tax liability. Instances of such life-changing
events as getting married, or having children can make you eligible for tax
credits and tax deductions as well. If these changes do affect your tax
liability and reduce them, you may receive a refund to account for the
lower taxes owed.
Tax Credits
Tax credits are considered to be powerful tools that have a significant
impact on the process of reduction of tax liability. For example, the Earned
Income Tax Credit (EITC) is beneficial for individuals having low to moderate
income. If the total calculated tax credit exceeds the total tax owed, the
excess amount is refunded. These are somewhat complicated matters and
hence it is better to leave this responsibility to an expert tax accountant in
Los Angeles.
Taxes That Are Overpaid
At times it might happen that an individual or a business has paid more
taxes throughout the year than what their tax liability was. This can happen
due to excessive withholding from paychecks or overestimating estimated
tax payments. The refund that is issued is to return the surplus funds that
are paid to the government, effectively reconciling the taxpayer’s account.
This is the reason you need a tax accountant in Los Angeles for errorless
calculations.
Tax Credits
At times it might happen that an individual or a business has paid more
taxes throughout the year than what their tax liability was. This can happen
due to excessive withholding from paychecks or overestimating estimated
tax payments. The refund that is issued is to return the surplus funds that
are paid to the government, effectively reconciling the taxpayer’s account.
This is the reason you need a tax accountant in Los Angeles for errorless
calculations.
Thank You!
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