Nobody likes leaving money on the table, but every year a number of people do because they overlook valuable tax breaks. Using DIY tax software like ezTaxReturn can help you get tax credits and deductions you didn’t even know existed. See which tax breaks people commonly miss, so you avoid making the same mistake.
It’s no secret that donating to charity can help lower your taxable income but one of the most commonly overlooked contributions are weekly church tithes. Considering that most churches recommend tithing at least 10 percent of your salary, the savings can really add up. When donating to your church or any other charity, be sure to keep good records including the name of the organization, donation date and the amount. If you plan to donate more than $250 at once, you’ll also need a written acknowledgement from the organization. Don’t forget that if you drove for charity, you can also deduct 14 cents per mile plus any fees paid for tolls and parking. In order to take this deduction, you must itemize your return.
Did your winning streak come to an end this year? If so, we have some news that may make your losses a bit easier to swallow. You can deduct any gambling losses that are less than your winnings as long as you itemize. For example, if you won $350 but lost $500, you can deduct up to $350 of losses on your return. As usual, be sure to hold on to receipts, tickets and any other documents that support your claims.
Earned Income Credit
Even though the Earned Income Credit (EIC) has been around for over 40 years, 1 in 5 workers still fail to claim it at tax time. This is unfortunate because the credit is worth up to $6,935. However, your actual credit amount may vary depending on your filing status, earned income and number of qualifying children. Don’t have kids? Don’t worry, you may still be eligible. The easiest way not to miss out is to do your taxes with ezTaxReturn. We’ll help you claim the EIC along with any other eligible tax breaks so you get the biggest possible refund.
Educators who use their own money to buy classroom materials can deduct up to $300 worth of unreimbursed expenses on their tax return. Eligible expenses include books, supplies, computer equipment (including software and services) and other related materials. To qualify, you must be a K-12th grade teacher, instructor, counselor, principal or aide and work in a school at least 900 hours per academic year. The best part is you don’t have to itemize your return to take this deduction. Please note, if you and your spouse are both educators, you can deduct up to $600 total but neither party cannot exceed the $300 limit.
Do you contribute to an IRA or employer-sponsored retirement plan during the year? If so, you may qualify for the Retirement Savings Contributions Credit (Saver’s Credit). To be eligible, you must be 18 or older, out of school and not listed as a dependent on anyone’s tax return. Depending on your AGI and filing status, your credit may be worth 50, 20 or 10 percent of your contributions up to $2,000 ($4,000 if married filing jointly).