Tax season is often dreaded. No one wants to find out that they owe a lot of money to the IRS at the end of the year and it is hard to have any ideas about how much you owe until you are in the middle of filing your taxes. There are some calculators that can help out, but with the ever changing tax laws in place, these are not always the most accurate. One way that you can make sure your tax bill stays low, no matter what your tax situation, is to find all the tax credits and deductions that can apply to you.
Tax credits and deductions are great because they work in a way that lowers your tax bill at the end of the year. How much you can save depends on how many of these tax benefits you can qualify for. While you may be able to find some of these tax credits and deductions on your own, it is usually best to have someone there to help you out. A tax professional will be able to take a look at your paperwork and your tax return and ensure that you are getting the most back out of this tax season as possible. Let’s look at some of the best tax credits you can apply for in order to lower that tax bill and put more money back in your pocket.
Child Credits
There are several credits that you can get at tax time for having a child. First, for all dependents who are still living in your home and you are supporting, you will be able to deduct this from your tax bill. Your tax professional will be able to show you how to do this and get the biggest deduction per child, but make sure to bring in their social security cards so you can get the information put in the right spot.
Another credit that you can go for with your children in the childcare credit. If you work outside the home or have someone watch your children while you are searching for a job, you can deduct some of these daycare costs. This is a great way to ensure that your children are getting cared for while also saving some money during tax season.
Education Credits
Whether you are going to school and need help paying off some of your tuition or your books or you are paying off your student loans after you are done with school, there are some deductions and credits that will work out nicely for you. Your school is going to send you the paperwork that you need in order to deduct personal costs to your education. If you want to claim the books and other supplies, make sure to keep good receipts and use this information as well. For those who are paying off their student loans, the loan provider will send you the right forms stating how much you are able to deduct for your interest payments. You are able to deduct up to $2500 each year in these expenses.
Sales Tax
You are able to deduct some of the sales tax that you paid throughout the year. If you are really good at keeping receipts, you can get a lot out of this as you deduct from all of your purchases. But since most people don’t want to keep every receipt that they use during the year, most of the time you will concentrate on keeping track of the big items that you purchased and had sales tax on. For example, if you purchased a new car, you probably had to spend some money in your state for sales tax and getting the car licensed and registered. Keep the receipts after you do this as you can deduct them off your tax return.
Charities
Charitable donations can be used to lower your tax bill. If you are already donating to your favorite charity, make sure that you are getting a receipt, or at least keeping a blank copy of the check available to use during tax time. You can deduct any donations that you give including clothes, food, other items, and money. When you are ready to file your taxes, make sure to bring in these receipts, checking that the name of the charity, the date, and the amount you donated are listed on the sheet, and your tax professional will be able to help you.
Mortgage Interest
If you own your home and are making mortgage payments on it, you may find that it is a good idea to claim some of the money that you paid on interest on the home. This is money that you are already paying into if you own the home and the IRs will often give you a bit of a break for making these payments as an incentive for helping out real estate in your area. Your mortgage company will send you the right forms to use on the tax return so you won’t have to worry about figuring out the right amount that you paid in taxes.
When you are ready to file your tax return, turn to the best in the tax industry. Our professionals are ready to take on your tax return issues, whether they are big or small, and give you the results you are looking for. Contact us today to get started.
Simon Hase, CPA