If you're a procrastinator like some of us, before you file that return, don't forget about certain tax write-offs to claim commonly missed credits.
We all want more back in that refund check and want to owe less, right? The average refund is just over $3.000, and for many people that is the largest check we will get every year.
Tax credits are a dollar-for-dollar amount that taxpayers claim on your returns. So, to reduce the income tax you owe -- write-offs will take the amount of your taxable income down and beef up that refund check.
The IRS will roll off more than 120 million refund checks... don't shortchange yourself.
"People leave money on the table every year by missing out on valuable deductions and credits," said Lisa Greene-Lewis, CPA and tax expert with Turbo Tax.
Greene-Lewis is also a homeowner and mom with two kids in college. She reminds everyone that one of the most commonly missed write-offs include interest on mortgages and student loans.
"Especially with student loans because it was paused for a while with COVID relief and now its back," she said. "Those that are paying student loans need to realize they can deduct up to $2,500 in student loan interest for what they paid in federal or private student loans."
Greene-Lewis adds that anyone who is self-employed or works from home might also forget to deduct part of their household expenses used as a home office.
"It's a valuable deduction," Greene-Lewis said. "You get a portion of your rental home, mortgage, interest, property taxes, and utilities, based on the amount of space that you use."
Now on to credits. Don't overlook those kids and dependents. Green-Lewis acknowledged the Earned Income Tax Credit for a family of three kids is now up to $7,830.
If you or your child is a student, there's the American Opportunity Tax Credit, which is for undergrad college students that qualify for up to $2,500 in educational costs, like textbooks and tuition.
Also, savers can get rewarded. If you put money into a retirement account, like an IRA or 401(k), you may be eligible for up to $1,000 through the Savers Tax Credit. And if you're green, you can earn some green! Electric vehicles will drive you into a clean vehicle tax credit worth up to a whopping $7,500 for new cars and so will earth-friendly upgrades to your home.
Last but not least, remember credits are a dollar-for-dollar reduction on the taxes you owe.
Under the Inflation Reduction Act, energy-efficient credits were expanded. So, if you put in eco-friendly windows and doors, you can get a credit of up to $1,200. A solar water heater could net you up to $2,000, and you could get 30% back of your solar panels cost.
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