My refund tax preparation facts

This is probably one of the most frequently asked questions on a taxpayer's mind during tax preparations. There are many factors that will help you get your biggest allowable refund. I will only discuss a few and perhaps write a dedicated lens just on this topic.

A key part of maximizing your tax refund comes from listing your allowed exemptions on your tax return. An exemption amount reduces the portion of a taxpayer's income that is subject to tax. In other words, it reduces the amount of taxes you have to pay to the IRS. Each exemption you claim on this year's tax return (between now and April 15, 2010) will reduce your tax liability dramatically.

Types of exemptions. There are two types of exemptions you may be able to take:

Personal exemptions for yourself and your spouse, and Exemptions for dependents (dependency exemptions).

While each is worth the same amount ($3,650 for 2009), different rules apply to each type.

In addition, the IRS allows a Standard Deduction which is a dollar amount that reduces your taxable income. Your standard deduction on your return will be based on the following factors:

Filing Status Age Blindness Dependency Status Real estate taxes paid

The standard deductions for most taxpayers is as follows:

Single or married filing separately - $5,700 Married filing jointly or Qualifying widow(er) - $11,400 Head of household - $8,350

There are of course other credits that are either Nonrefundable or Refundable Credits. Refundable Credits may result in payments that the IRS will send you if you have no tax liability (after calculating your exemptions and standard deductions) in the form of a refund. Every taxpayer is a different case so your exact refund will be based on different credits and tax liabilities pertaining to your specific situation. Your eligibility will be easily determined by the tax program you use or your tax preparer.