Latest news with #taxrefund
Yahoo
23-07-2025
- Business
- Yahoo
Are you leaving money on the table? 6 signs that you could be overpaying on your taxes
Do you like paying more in taxes than you have to? Probably not. Overpaying on taxes is one of the most common and avoidable mistakes I see as a financial coach. Every year, new clients unknowingly hand over more money to the IRS than necessary — not because they're rich, reckless or shady, but because they simply don't know what to look for at tax time. So let's break down the biggest ways you may be giving the IRS more than your fair share, and how you can fix it. 1. You're celebrating when you get a big tax refund Approximately 64 percent of all tax returns filed in 2024 resulted in refunds, based on IRS data through Dec. 27, 2024. In fact, the average tax refund for the most recent tax season was $3,138. If you got that amount back, you might be celebrating, but guess what? That was your money, and the government just borrowed it interest-free. Receiving a tax refund, especially a sizable one, is a sign that you overpaid in taxes throughout the year. When my clients have received large refunds, we've worked with their tax advisors to adjust their withholdings and increase their cash flow throughout the year. That extra money in each paycheck has helped to: Pay down high-interest credit card debt Make extra car loan payments Earn passive income in a high-yield savings account Contribute to retirement savings Save up for their next vacation How to fix it If your refund was more than a few hundred dollars, it's worth consulting with a tax professional to adjust your W-4 withholdings. You can use the extra money in your paychecks to meet your financial goals throughout the year, rather than waiting until the next tax season to get the money back. 2. You're filing under the wrong status Your tax filing status affects your standard deduction, tax brackets and eligibility for certain credits. A common tax mistake occurs when single parents qualify as 'head of household' but file as 'single.' Let's say you're a single mom with one child, and you earn $60,000 a year. If you select single as your filing status, your standard deduction for 2025 is $15,750 (under the Trump administration's new tax guidelines). But as head of household, your standard deduction is $23,625. The higher deduction amount reduces your tax liability and keeps more of your money in your pocket. As a bonus, head of household filers receive a lower tax rate. Not accounting for the higher standard deduction, the single mom earning $60,000 would pay nearly $1,400 less in taxes. How to fix it There are five filing status options, and your choice can have a big impact on your tax burden. For example: If you're married, should you file taxes jointly or separately? You'll also have to decide whether to claim the standard deduction or itemize deductions. Check with your tax professional to ensure you are filing under the optimal status. 3. You're managing investments without a tax game plan I see this a lot with newer investors: You get a good return on investments, so you sell them without realizing what kind of taxes you're on the hook for. Short-term capital gains (investments held for one year or less) are taxed like regular income, with tax rates of up to 37%. Long-term gains (held over a year) are taxed at 0%, 15% or 20%, depending on your income. And if you have investments that have lost value, you can sell those to offset gains. It's called tax-loss harvesting, and it can seriously lower your tax bill if done right. If you've recently been unemployed, switched jobs or taken a pay cut this year, it could be an opportunity to do a Roth conversion — moving money from a Traditional IRA or 401(k) into a Roth IRA to pay the taxes now so you don't have to pay taxes later. Read more: How to avoid paying capital gains taxes on investments How to fix it Any changes in your investments can trigger a potential tax bill you weren't planning on.I don't recommend tax loss harvesting or Roth conversions without the help of a licensed financial advisor and a tax professional. I assure you that what you'll pay in expert help can save you thousands over time.A dip in income or losses in your investment can have a bright side for your taxes and your long-term investing strategy — if you move strategically. 4. You're not using tax-friendly accounts first I've had countless clients tell me they started investing in a brokerage account because it was easy through their bank or an app, before contributing the maximum to their tax-friendly accounts first. Building savings in any high-yield vehicle builds financial resiliency, but prioritizing saving in tax-friendly accounts first can also help reduce your tax liability. Here's why that's a big deal: Traditional IRA or 401(k) contributions reduce how much you pay in taxes. For example, if you invest $1,000 in a traditional IRA, the income used to calculate your tax liability will be $1,000 less. Roth IRA withdrawals are tax-free if they meet certain criteria. For example, if you invest $1,000 in a Roth IRA and that amount grows to $5,000, that entire $5,000 will not be taxed. HSA (Health Savings Account) contributions can lower your taxes if you have a high-deductible health insurance plan (HDHP). The 'big beautiful bill' adds ACA bronze and catastrophic plans as qualified HDHPs. For example, if you invest $1,000 in an HSA, your taxable income will be lower by $1,000, and the earnings and withdrawals in the HSA will be tax-free if you use it for qualifying health expenses. How to fix it If you're not maxing out your retirement account before putting money in a brokerage or high-yield savings account, you're likely paying more taxes — both now and later. Consider moving the money in your brokerage account into one of these types of accounts to either save taxes now or in the future. 5. You're not claiming enough deductions for your business or side hustle Small businesses take many forms — and in some cases, your side hustle counts as a business. Side hustlers often forget to track their expenses, which means they could be overpaying on their taxes. For example, if you use your phone to promote your business on Instagram or answer client calls, part of your phone bill could be deductible. The same goes for things like subscriptions, mileage, office supplies and even a portion of your home, if you conduct business there. Read more: Common tax mistakes businesses make every year And if you're a solo entrepreneur and earning income from a side hustle or business, you can open a SEP IRA or Solo 401(k) to save for retirement and reduce your taxable income. How to fix it Don't be afraid to ask about all expenses if you're unsure. Whenever I incur a new expense, particularly a large one, I always consult with my tax advisor to determine whether I can deduct worst-case scenario is that she'll tell me no, but I've been pleasantly surprised at how many times she's said yes! 6. You're not working with a vetted tax nerd I love a good DIY moment, but taxes are not the time to wing it. I'm a money coach whose parents and brother were all accounting experts, and even I have never once done my taxes without consulting a tax professional. If your situation is even slightly complex (you run a business, have investments, bought a house or had major life changes, like a birth or death), it's worth getting help. But don't hire just anyone. Find someone who understands your specific situation. Because I run a consulting business, I needed a tax pro who actually understood my business to help me find the right deductions. Not all tax professionals are created equal, and the one that's best for you may not be right for me. How to fix it When shopping for a tax professional, ask for references and make sure they are knowledgeable about the latest tax code, especially since Trump's tax and spending bill passed in July 2025. The bill also ended the IRS Direct File program, which was used by more than 140,000 taxpayers in 2024 to file their federal income tax returns for free. I also encourage you to meet with your tax partner quarterly, or mid-year at a minimum, to check in on your taxes and ensure you're not caught by surprise during tax season. Questions to ask your tax partner You don't have to wait until tax time to clarify your tax strategy. Bring the following questions to your tax advisor during their off-season so you'll have plenty of time to create a plan if you need to make changes before filing. Have I maxed out all the tax-advantaged accounts I'm eligible for? Double-check if you can still contribute to IRAs, HSAs, FSAs or retirement plans through your business. Am I using the best filing status for my situation? Ask your tax professional to run scenarios under different statuses to show the difference. What deductions or credits am I eligible for that I might be missing? Ask specifically about education credits, the saver's credit or self-employment deductions if they apply to you. Also, ask whether any of your regularly claimed deductions or tax credits are impacted by the new tax bill, and what that means for your money. Should I adjust my withholding so I'm not overpaying during the year? If you got a big refund last year, this one's especially important. Would a Roth conversion or tax loss harvesting make sense for me this year? If you lost money in investments, your income dropped or you expect to be in a higher bracket, this could save you money long term. Does Trump's Big, Beautiful Bill have you feeling anxious? With the passage of the Trump administration's so-called Big, Beautiful Bill, several popular tax breaks were axed. Proponents of the new law claim that it will reduce the tax burden for many Americans, but skeptics aren't so sure. If any of the following scenarios apply to you, your tax situation may be changing for 2025. Paying for school for yourself or a family member Saving for retirement Managing student loans Running a small business Receiving tips as part of compensation Receiving Medicaid benefits With the big changes to the tax code, it's more important than ever to consult with a licensed tax professional to be sure you're claiming everything you're eligible for and meeting the requirements needed to qualify for certain tax credits. Final thoughts: There are no bonus points for paying more than necessary Paying taxes is a part of adulting. While you shouldn't try to pay less than your legal obligation, overpaying isn't going to help you reach your money goals faster. Learning how to lower your tax bill is one of the smartest money moves you can make, and all the moves mentioned above were available even before the bill passed. You don't have to become a tax expert, but you do need a healthy wealth plan that includes an efficient tax strategy. Whether you're investing for the first time, running a side hustle or trying to build generational wealth, paying the right amount of taxes frees up more of what you earn and supports your path toward financial freedom.
Zawya
21-07-2025
- Business
- Zawya
UAE tax authority announces $871mln in tax refunds for Emiratis building new residences by June
ABU DHABI: The Federal Tax Authority (FTA) continues to see strong results from its digital VAT refund systems for eligible categories, maintaining high levels of accuracy and operational efficiency throughout 2025. The FTA today revealed the results of these systems for the first half of the year, including the VAT refund system for new residences for UAE nationals and the VAT refund system for tourists. The FTA announced that, since the launch of the service approximately eight years ago and up until June 2025, the total number of approved applications for VAT refunds related to new residences for UAE nationals reached approximately 38,000, amounting to a total value of AED3.2 billion. This marks a significant increase from the 31,000 approved applications valued at AED2.54 billion by June 2024, reflecting a 22.74% growth in the number of applications and a 25.72% increase in the value of refunds within the past year. The FTA also highlighted that more than 7,000 new applications for VAT refunds for UAE nationals building new residences were approved between June 2024 and June 2025, amounting to AED653.1 million. Furthermore, in the first half of 2025 alone, 3,097 new applications were approved, resulting in refunds totalling AED284.77 million. The FTA highlighted the continued significant expansion of the digital tax refund system for tourists, as the number of retail shops electronically linked to the system saw consistent growth across all emirates. By the end of June 2025, the number of outlets registered with the Authority and connected to the system had increased to 18,410 shops, compared to 17,720 shops by the end of 2024 and approximately 17,080 shops by June 2024. The FTA further noted that 697 outlets connected to the system in the first half of 2025, up from 540 outlets during the same period in 2024, marking an increase of over 29%. This brings the total number of outlets that have joined the digital tax refund system for tourists in the past two years, including the first half of 2025, to 3,390 outlets. With regard to the self-service machines that fully automate the tax refund process for tourists departing the country in approximately two minutes per transaction, which are available at major shopping malls, hotels, and departure points for tourists, the number of these machines reached 96 by the end of June. Khalid Ali Al Bustani, Director General of the FTA, said, 'The indicators reflect the ongoing development and upgrade of our digital systems in line with global best practices, and in alignment with the UAE's digital transformation strategy. The Authority's initiatives in this regard have positively impacted the overall quality and performance of its services, particularly the digital VAT refund systems for eligible categories. 'Notable examples include the tax refund services for new residences for UAE nationals and VAT refund for tourists, which have undergone continuous improvement to streamline and expedite the refund process. 'Among the key initiatives in this area is the 'Maskan' smart application, which enhances the ease and convenience of VAT refunds for UAE nationals, and relies on paperless procedures with 100% fully digitised procedures.' Al Bustani added, 'As part of its efforts to develop digital services, FTA launched last December the world's first e-commerce purchases VAT refund system for tourists during their stay in the UAE, supporting the UAE's leadership in all sectors, including the tourism sector and the e-commerce sector, in continuation of what has been achieved in this field, where more than two years ago the Authority launched the digital VAT refund system for tourists, which is based on 100% paperless procedures and is constantly updated, and provides a digital platform that allows tourists to scan their passports easily, and automatically share their transactions as digital invoices, check their invoices through the shopper portal for a seamless shopping experience, and receive a refundable tax credit for their purchases in a convenient and fully digitalised manner.' He stressed that the Authority would continue to launch and implement various projects and initiatives in the field of digital transformation in the tax sector to keep pace with the government's digital transformation strategy placed for all services based on smooth and proactive digital infrastructure, supporting efforts to reduce bureaucracy and maintain high levels of customer satisfaction.
Zawya
20-07-2025
- Business
- Zawya
Federal Tax Authority announces AED 3.2bln in tax refunds for UAE nationals building new residences by June 2025
Abu Dhabi: The Federal Tax Authority (FTA) continues to see strong results from its digital VAT refund systems for eligible categories, maintaining high levels of accuracy and operational efficiency throughout 2025. The FTA today revealed the results of these systems for the first half of the year, including the VAT refund system for new residences for UAE nationals and the VAT refund system for tourists. The FTA announced that, since the launch of the service approximately eight years ago and up until June 2025, the total number of approved applications for VAT refunds related to new residences for UAE nationals reached approximately 38,000, amounting to a total value of AED 3.2 billion. This marks a significant increase from the 31,000 approved applications valued at AED 2.54 billion by June 2024, reflecting a 22.74% growth in the number of applications and a 25.72% increase in the value of refunds within the past year. The FTA also highlighted that more than 7,000 new applications for VAT refunds for UAE nationals building new residences were approved between June 2024 and June 2025, amounting to AED 653.1 million. Furthermore, in the first half of 2025 alone, 3,097 new applications were approved, resulting in refunds totalling AED 284.77 million. Digital Tax Refund System for Tourists The FTA highlighted the continued significant expansion of the digital tax refund system for tourists, as the number of retail shops electronically linked to the system saw consistent growth across all emirates. By the end of June 2025, the number of outlets registered with the Authority and connected to the system had increased to 18,410 shops, compared to 17,720 shops by the end of 2024 and approximately 17,080 shops by June 2024. The FTA further noted that 697 outlets connected to the system in the first half of 2025, up from 540 outlets during the same period in 2024, marking an increase of over 29%. This brings the total number of outlets that have joined the digital tax refund system for tourists in the past two years, including the first half of 2025, to 3,390 outlets. With regard to the self-service machines that fully automate the tax refund process for tourists departing the country in approximately two minutes per transaction, which are available at major shopping malls, hotels, and departure points for tourists, the number of these machines reached 96 by the end of June. His Excellency Khalid Ali Al Bustani, Director General of the FTA, said: 'The indicators reflect the ongoing development and upgrade of our digital systems in line with global best practices, and in alignment with the UAE's digital transformation strategy. The Authority's initiatives in this regard have positively impacted the overall quality and performance of its services, particularly the digital VAT refund systems for eligible categories. 'Notable examples include the tax refund services for new residences for UAE nationals and VAT refund for tourists, which have undergone continuous improvement to streamline and expedite the refund process. 'Among the key initiatives in this area is the 'Maskan' smart application, which enhances the ease and convenience of VAT refunds for UAE nationals, and relies on paperless procedures with 100% fully digitised procedures.' Al Bustani added: 'As part of its efforts to develop digital services, FTA launched last December the world's first e-commerce purchases VAT refund system for tourists during their stay in the UAE, supporting the UAE's leadership in all sectors, including the tourism sector and the e-commerce sector, in continuation of what has been achieved in this field, where more than two years ago the Authority launched the digital VAT refund system for tourists, which is based on 100% paperless procedures and is constantly updated, and provides a digital platform that allows tourists to scan their passports easily, and automatically share their transactions as digital invoices, check their invoices through the shopper portal for a seamless shopping experience, and receive a refundable tax credit for their purchases in a convenient and fully digitalised manner.' His Excellency stressed that the Authority would continue to launch and implement various projects and initiatives in the field of digital transformation in the tax sector to keep pace with the government's digital transformation strategy placed for all services based on smooth and proactive digital infrastructure, supporting efforts to reduce bureaucracy and maintain high levels of customer satisfaction. -Ends- About Federal Tax Authority: The Federal Tax Authority was established by Federal Decree-Law No. (13) of 2016 to help diversify the national economy and increase non-oil revenues in the UAE through the management and collection of federal taxes based on international best practices and standards, as well as to provide all means of support to enable taxpayers to comply with the tax laws and procedures. Since its inception in 2017, the FTA has been committed to cooperate with the competent authorities to establish a comprehensive and balanced system to make the UAE one of the first countries in the world to implement a fully electronic tax system that encourages voluntary compliance, with simple procedures based on the highest standards of transparency and accuracy – beginning from registration, to the submission of tax returns, to the payment of due taxes through the Authority's website:
Khaleej Times
20-07-2025
- Business
- Khaleej Times
UAE approves Dh3.2 billion VAT refunds for citizens building new homes until June 2025
The UAE's Federal Tax Authority (FTA) continues to see strong results from its digital VAT refund systems for eligible categories, maintaining high levels of operational efficiency throughout 2025. The FTA on Sunday revealed the results of these systems for the first half of the year, including the VAT refund system for new residences for UAE nationals and the VAT refund system for tourists. The FTA announced that, since the launch of the service approximately eight years ago and up until June 2025, the total number of approved applications for VAT refunds related to new residences for UAE nationals reached approximately 38,000, amounting to a total value of Dh3.2 billion. This marks a significant increase from the 31,000 approved applications valued at Dh2.54 billion by June 2024, reflecting a 22.74 per cent growth in the number of applications and a 25.72 per cent increase in the value of refunds within the past year. The FTA also highlighted that more than 7,000 new applications for VAT refunds for UAE nationals building new residences were approved between June 2024 and June 2025, amounting to Dh653.1 million. Furthermore, in the first half of 2025 alone, 3,097 new applications were approved, resulting in refunds totalling Dh284.77 million. Digital tax refund system for tourists The FTA highlighted the continued significant expansion of the digital tax refund system for tourists, as the number of retail shops electronically linked to the system saw consistent growth across all emirates. By the end of June 2025, the number of outlets registered with the Authority and connected to the system had increased to 18,410 shops, compared to 17,720 shops by the end of 2024 and approximately 17,080 shops by June 2024. The FTA further noted that 697 outlets connected to the system in the first half of 2025, up from 540 outlets during the same period in 2024, marking an increase of over 29 per cent. This brings the total number of outlets that have joined the digital tax refund system for tourists in the past two years, including the first half of 2025, to 3,390 outlets. With regard to the self-service machines that fully automate the tax refund process for tourists departing the country in approximately two minutes per transaction, which are available at major shopping malls, hotels, and departure points for tourists, the number of these machines reached 96 by the end of June. Khalid Ali Al Bustani, Director General of the FTA, said, 'The indicators reflect the ongoing development and upgrade of our digital systems in line with global best practices, and in alignment with the UAE's digital transformation strategy. The Authority's initiatives in this regard have positively impacted the overall quality and performance of its services, particularly the digital VAT refund systems for eligible categories. 'Notable examples include the tax refund services for new residences for UAE nationals and VAT refund for tourists, which have undergone continuous improvement to streamline and expedite the refund process. 'Among the key initiatives in this area is the 'Maskan' smart application, which enhances the ease and convenience of VAT refunds for UAE nationals, and relies on paperless procedures with 100% fully digitised procedures.' Al Bustani added: 'As part of its efforts to develop digital services, FTA launched last December the world's first e-commerce purchases VAT refund system for tourists during their stay in the UAE, supporting the UAE's leadership in all sectors, including the tourism sector and the e-commerce sector, in continuation of what has been achieved in this field, where more than two years ago the Authority launched the digital VAT refund system for tourists, which is based on 100 per cent paperless procedures and is constantly updated, and provides a digital platform that allows tourists to scan their passports easily, and automatically share their transactions as digital invoices, check their invoices through the shopper portal for a seamless shopping experience, and receive a refundable tax credit for their purchases in a convenient and fully digitalised manner.' He stressed that the authority would continue to launch and implement various projects and initiatives in the field of digital transformation in the tax sector to keep pace with the government's digital transformation strategy placed for all services based on smooth and proactive digital infrastructure, supporting efforts to reduce bureaucracy and maintain high levels of customer satisfaction.
CTV News
19-07-2025
- Business
- CTV News
Canadians voice frustrations with CRA over delays accessing benefits, refunds
Canada Revenue Agency (CRA) national headquarters is seen in Ottawa on Friday, June 28, 2024. THE CANADIAN PRESS/Sean Kilpatrick Chris Ellis has been trying to access his tax refund for four months. He's just one of dozens of Canadians who tell CTV News the significant wait times and other challenges contacting the Canada Revenue Agency (CRA) are preventing them from accessing certain benefits. From getting locked out of accounts for extended periods to getting stuck in a loop on the automated voice messaging system, many are expressing frustration with the agency's communication. In response to a CTV News article encouraging Canadians to reach out about their experiences with the CRA, several people shared that they have been waiting months to have their issues resolved. Ellis, for his part, was notified he'd been locked out of his CRA account after his bank, HSBC, was bought out by RBC, changing his direct deposit information and triggering a security alert. But Ellis says he didn't learn he'd been locked out until more than a month after he filed his taxes. 'I called CRA, and after listening to useless advice and options, I finally realized that I was in a loop: there was no way to reach an actual agent, and there was no option to select one,' Ellis wrote. 'This went on for about three weeks, with me calling in, going through the useless messages that took about six minutes, only to find out there were no agents available.' 'Super frustrating given that my account was locked out,' he added. Ellis then had to submit documentation through a portal — more than once — to prove his identity, but he still hasn't received his tax refund. 'So here I am, almost four months after submitting my tax return, and I am still in limbo,' he said. Ellis adds that CRA employees, once they can be reached, are 'very sharp' and 'very helpful,' but that the issue lies with the online and phone services. Delays causing 'extreme stress' 'I have been unable to reach a human at the CRA for weeks,' wrote Eric Enright in an email to CTV News. 'I have called periodically, maybe 10-15 times, and every time it just says all agents are busy and pushes me to an automated system that can't help. It is very frustrating.' 'I have no problem waiting hours, as I can just leave my phone beside me while I work,' Enright added. 'It's ridiculous, in my opinion, to not even give people the option of waiting.' Paul Medhurst said his tax return was filed mid-April but also has still not been processed. 'This failure of CRA is causing me extreme stress, worry and I'm losing a lot of sleep,' Medhurst said. '(I) worry of being broke and having my income held.' He added the delay in processing his tax return is preventing him from accessing monthly disability benefits. Sarah Kienitz wrote that it's taken months to receive the Canada Child Benefit, for which she's been approved. 'I attempted to contact the CRA three times to find out what the hold up was and to get clarity about why my taxes had been processed, but this was taking much longer,' she wrote. 'Each time I received a message that agents were busy and there was no option to even remain on hold, or any other way to contact them, except the chatbot that inevitably told me to call an agent with my queries.' 'I find it incredibly frustrating that I have tax deadlines and can be penalized for not completing on time, but the CRA can drag their heels almost four months before even telling me what my benefit entitlements are,' Kienitz also wrote. Others complained that CRA delays and communication challenges are preventing them from distributing estates for which they are the executor. Government departments tasked with finding savings Prime Minister Mark Carney, meanwhile, has pledged billions in new spending while promising to balance its operating budget. That will likely mean significant cuts to the size of the federal public service, according to the parliamentary budget officer. Ahead of a planned fall budget, government departments are being asked to find their own internal savings by the end of August, CTV News has confirmed. The Globe and Mail reported Friday the CRA is among the departments in the early stages of determining where to make cuts, as the union representing CRA employees is warning the cuts could 'disproportionately' affect call centres. Complaints about CRA wait times are not new. A 2017 report by the Auditor General found that the agency gave 'very limited access to its call centre services,' and that it blocked more than half the calls it received because it couldn't handle the volume. Also a 2023 report by the taxpayers' ombudsperson found the agency failed to properly communicate about the problem when thousands of people were locked out of their account two years prior. That report acknowledged specific challenges at the time, namely an overwhelming number of requests with the CRA while it distributed COVID-19-era relief benefits. 'This examination has highlighted a recurring issue at the CRA, where it communicates reactively rather than proactively,' the report concluded. In an email statement to CTV News, CRA spokesperson Charles Drouin said the agency is encouraging people to use online self-service tools — such as CRA My Account and the AI chatbot — before calling, because an estimated quarter of reported issues can be solved without an agent. 'We regret the inconvenience this situation may cause and are actively working to continuously improve both our phone and digital services,' Drouin wrote. 'By expanding self-service options, we aim to make it easier for Canadians to get the help they need quickly, securely, and without needing to speak to an agent.' Drouin added the CRA understands wait times can be frustrating, and that it values 'providing timely, high-quality service.' 'At times, demand for phone support can exceed our capacity and as a result, some callers are being redirected to automated self-service options,' Drouin wrote. Efforts to streamline certain processes are underway, including by changing some of its authorization requirements for individuals representing a client, according to a press release from the CRA this week. With files from CTV News' Stephanie Ha
