Deductions That Will Increase Your Tax Refund

This year’s tax season has already begun, and people all over the country have already started filing their tax returns. Over 153,000,000 individual returns will be filed this year, and nearly 73% of all filers are expected to receive a refund.

We could all use little extra money, and for some people, this may be the most significant check they get all year! While things like charitable donations can increase your tax refund, there are a few you may have forgotten! Here are a few deductions that will enhance your tax refund.

Moving Expenses

If you moved this past year for a new job, you might be able to deduct some of your moving expenses. This deduction will cover any expenses you incur during the transport of your move to your new home. You can include the cost of renting a storage unit if you weren’t able to move into your home immediately, the cost of travel such as gasoline, tolls, and more.

Dependents

For your dependents, you can get a deduction for each qualifying child. This includes any child, stepchild, foster child, sibling or step-sibling, or even your grandchild if you are the primary caretaker. To qualify, the dependent must have lived with you for more than half of the calendar year, be under the age of 19 or a full-time student under the age of 24 and attend school for at least part of five calendar months.

Health Insurance Premiums

If you have paid deductible medical expenses that were more than 7.5% of your gross income, you can claim them as an itemized deduction. If you are self-employed and responsible for your coverage, you may be able to deduct 100% of your premiums! This is typically taken off of your adjusted gross income instead of an itemized deduction.

Learning Credit (Going To College Tax Deduction)

If you or a dependent is going to college, everything from textbooks to tuition is tax deductible. You can use the tuition and fees deduction of up to $4,000 using a Form 8917. Depending on your filing status, in some cases, you may be able to get your entire tuition back or more for the cost of going to school!

Interest Expense

If you have borrowed money for property or on student loans, you can get a deduction for the interest you’ve paid. You cannot deduct the interest on the loan you used to buy a property that produces income. However, you can use it for investment interest such as a rental property.

Car For Business Use

If you drive for your business, you can deduct your mileage or use the standard mileage rate to determine your deduction. Your business use should be legitimate, however, don’t let those trips to Lowe’s for your business go to waste!

Home For Business Use

Do you own an home business? If you have a dedicated office area, you can deduct the cost of this area from your rent or mortgage for your business! If your home office is eligible, you could get a significant amount of savings if you qualify. Any money spent to maintain or repair this space is also deductible, any special phone lines for your business can be written off.

Retirement Contributions

The amount of your adjusted gross income and filing status will depend on how much you can claim a credit. You can claim a credit for 50, 20, or 10 percent of the first $2,000 you contribute during the year to your retirement account. Depending on which bracket you fall into, you could end up getting as much as $1,000 back!

Residential Energy Efficient Property Credit

If you made upgrades to your home to make it more energy efficient, you might be able to get 30% of your amount paid back during the taxable year.

Here are some of the qualifying systems:

• Solar water heater
• Solar electric system
• Small wind energy property
• Geothermal heat pumps
• Fuel cell property (limit $500 for each one-half kilowatt)

If you are looking to cut your taxes, don’t forget to check with your employer about adjusting your tax withholdings. If you are getting a refund, it might be because your withholding is too high, and you might need to withhold less.

YOUR TURN: Do you have a home business? Are there any items you could deduct from this past year? Let me know in the comments below!

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