15 Aug Frequently Overlooked Tax Benefits
Have you been preparing your own tax returns? If not, did you have somebody prepare it that didn’t make the effort to query you regarding possible tax deductions, filing status option or credits? If your answer to both questions is positive, you could have lost out on a number of tax benefits that could have saved you big money in taxes.
If something was forgotten, there is still time to get a reimbursement for 2015, 2016 or 2017. So if you know you missed something, or perhaps if you just want a professional to look over your past returns to see if something was forgotten, contact Schultz & Associates today.
Below is a list of some (but not all) frequently overlooked tax benefits that may apply to you. A few of these were extended to 2017 in a special bill passed by Congress in the middle of February 2018, so if you filed your 2017 return prior to that day or worked with a person who does not keep up with changes, there’s a possibility one or more items could put on you. Please pay attention that the listed below items apply to years 2015 through 2017.
Frequently Overlooked Tax Benefits
- Above-the-line Tuition Deduction — Makes possible to deduct approximately $4,000 for higher education tuition without itemizing deductions.
- American Opportunity Credit — Offers a tax credit of approximately $2,500 for the first four years of your or your qualified kid’s college tuition and certified expenditures, even if paid by somebody apart from you.
- Lifetime Learning Credit — Provides a credit of up to $2,000 for tuition and certified higher education costs for any members of your family.
- Student Loan Interest — Deductible without itemizing deductions and can save up to $2,500 for student loan interest paid.
- Mortgage Insurance Premiums — Premiums on agreements provided after 2006 can usually be subtracted as house mortgage interest when itemizing deductions.
- Home Energy Efficient Improvement — A tax credit of as much as $500 for making your residence energy efficient with certain improvements.
- Electric Vehicle Credit — If you purchase a plug-in electric vehicle, you can be entitled to $7,500, if the manufacturer has actually not surpassed the 250,000-unit sales restriction for qualifying for the credit.
- Excess FICA — If a person had more than one employer throughout the year and also the FICA withholding for the year surpassed the general FICA withholding cap, the excess is refundable on the 1040.
- Consumer Interest — Actually, consumer interest is not deductible, but there’s a little exception you can make use of. If you used the loan to buy an automobile or other property for business or personal purposes, the part of the interest belonging to business is deductible as business property (does not apply to worker business expenses).
- Surviving Spouse Filing Status — During the first two years after the death of a partner, another living spouse with a dependent child could continue taking advantage from the married filing joint tax rates.
- Head of Household Filing Status — If you are married, but living separately from your spouse for the last 6 months of the year, you could utilize the much more beneficial head of household filing status, which is normally only readily available for unmarried people.
- Saver’s Credit — For lower-income taxpayers making retirement plan or IRA contributions, the saver’s credit report provides a credit of 10, 20 or even 50 percent of the taxpayer’s payment to a retirement. The overall cap on this credit is $1,000.
- Medicare Premiums — Withheld from from Social Security benefits, these are frequently forgotten either as a medical itemized deduction or for the independent medical insurance deduction, so if you had any health issues, check these out as well.
- Penalty Abatement — On of the main advantages of hiring a professional to prepare your taxes, is that we use a variety of tax provisions to have different tax penalties abated, including the late filing penalty, ACA penalty for not having health insurance, penalty for not withdrawing the required minimum quantity from a pension plan or a traditional IRA, early retirement plan or IRA withdrawal penalty, negligence penalty and more.
- State Tax Refunds — The amount revealed on Form 1099-G, the state tax refund a taxpayer obtained from their prior year’s return, could not be federally taxed or could be just partly taxable. For example, a taxpayer may claim the standard deduction on their prior year’s federal return or if their previous year’s federal tax consisted of the alternative minimal tax.
These are just a few things frequently missed out by taxpayers and newbie tax preparers. If you want a professional review of your 2015, 2016 and also 2017 returns, call Schultz & Associates and we will help.