Don" t Forget About These Tax Breaks During Filing Season
The vast array of tax credits and deductions makes it difficult for many families to keep track of the number of benefits for which they may be eligible. As a result, a large percentage of Americans may be missing out on tax benefits that could increase the size of their refund or lower their amount of taxable income. Most individuals are aware of the big tax breaks, such as mortgage interest, education credits and deductions for charitable contributions; however, there are number of lesser-known benefits that many Americans may be able to claim.
Parents who send children under the age of thirteen to a child care service are highly familiar with the Child and Dependent Care Credit during the school year. But some may not be aware that this credit may also be claimed if parents send their children to summer day camps and meet other qualifications. However, in order to claim this credit, parents may only send their children to a service that provides care during the day while they work. The credit does not apply to overnight camps, Bankrate.com reports.
Low- or moderate-income individuals who contributed to a personal or employer sponsored retirement plan may also be eligible for a tax credit. The Saver's Credit, formerly referred to as the Retirement Savings Contribution Credit, allows Americans to receive a credit of one thousand dollars if filing single, or two thousand dollars for joint filers if they contribute a certain amount to their retirement fund. To qualify, individuals who are single, married filing separately or qualifying widow or widower must have an income of no more than $27,750. Taxpayers who are married filing jointly may not have an income that exceeds $55,500 and head of households must bring in no more than $41,625. Additionally, individuals who claim the credit must be born before January 2, 1993, not be a dependent on another's tax return and not be enrolled as a full-time student during the calendar year.
Individuals who refinanced their home may be allowed to deduct the points paid on their loan, similar to the allowance provided to new homeowners during their first year of purchase. However, in order to claim the deduction, the proceeds must have been utilized to make improvements to the homeowner's principal residence, according to Bankrate.com.
Taxpayers who have made any financial changes during the tax year, regardless of how minor, may benefit from discussing them with their tax preparer like the professionals at Liberty Tax Service to determine if they qualify for overlooked benefits.
Parents who send children under the age of thirteen to a child care service are highly familiar with the Child and Dependent Care Credit during the school year. But some may not be aware that this credit may also be claimed if parents send their children to summer day camps and meet other qualifications. However, in order to claim this credit, parents may only send their children to a service that provides care during the day while they work. The credit does not apply to overnight camps, Bankrate.com reports.
Low- or moderate-income individuals who contributed to a personal or employer sponsored retirement plan may also be eligible for a tax credit. The Saver's Credit, formerly referred to as the Retirement Savings Contribution Credit, allows Americans to receive a credit of one thousand dollars if filing single, or two thousand dollars for joint filers if they contribute a certain amount to their retirement fund. To qualify, individuals who are single, married filing separately or qualifying widow or widower must have an income of no more than $27,750. Taxpayers who are married filing jointly may not have an income that exceeds $55,500 and head of households must bring in no more than $41,625. Additionally, individuals who claim the credit must be born before January 2, 1993, not be a dependent on another's tax return and not be enrolled as a full-time student during the calendar year.
Individuals who refinanced their home may be allowed to deduct the points paid on their loan, similar to the allowance provided to new homeowners during their first year of purchase. However, in order to claim the deduction, the proceeds must have been utilized to make improvements to the homeowner's principal residence, according to Bankrate.com.
Taxpayers who have made any financial changes during the tax year, regardless of how minor, may benefit from discussing them with their tax preparer like the professionals at Liberty Tax Service to determine if they qualify for overlooked benefits.