With the right tax credits and deductions, you can maximize your refund or at least reduce what you owe. Therefore, it’s important to know what’s available. Using a tax preparation program like ezTaxReturn can help you claim every tax break you deserve. It’s fast, easy and you’ll get the biggest possible refund, guaranteed. Here are some of the most valuable tax breaks available this season.
Child Tax Credit
According to the USDA, it costs $284,570 to raise a child until their 18th birthday. The kicker is that figure doesn’t even include the cost of sending them to college. Fortunately, the Child Tax Credit can help put some cash back in your wallet. The credit is worth $2,000 per child aged 16 or younger and up to $1,400 is refundable.
Child and dependent care credit
Do you pay someone to watch your kids while you go to work? If the answer is yes, you may be eligible for the Child and Dependent Care Credit. Your children must be 12 or younger to qualify. The credit is worth up to 35% of your childcare expenses. You can claim up to $3,000 of expenses for one child or $6,000 for two or more children.
Earned Income Tax Credit (EITC)
The Earned Income Tax Credit was designed to give workers with low to moderate incomes (particularly those with children) a financial boost. For tax year 2020, the credit is worth up $6,660. However, the maximum you can receive is $538 if you don’t have any children. Four out of five eligible taxpayers claim the EITC. Don’t be the one who misses out. ezTaxReturn.com makes it easy to claim the EITC and any other money-saving tax breaks you qualify for. Pre-register now and receive a special discount when you file with us in 2021.
American Opportunity Tax Credit
Going to college is a huge financial decision. Tuition is expensive and the major you choose can dictate how much money you will earn in the future. Claiming an education credit can help ease the financial burden. If you paid for tuition, books and other supplies, you may qualify for the American Opportunity Tax Credit (AOTC). This can save you up to $2,500 on your taxes. The best part is if the credit reduces your tax bill to zero, you can receive the remaining credit (up to $1,000) as a refund. Students can only claim the AOTC during their first four years of college and you must be enrolled at least part-time for a semester.
Lifetime Learning Credit
Whether you’re pursuing a degree or taking courses to enhance your job skills, you may be eligible for the Lifetime Learning Credit. It is worth up to $2,000 per tax return. Unlike the AOTC, there is no limit on the number of years the credit can be claimed.
Student loan interest deduction
Most college students from the Class of 2019 took out loans and graduated with debt. If you’re currently paying back student loans, you may be able to deduct up to $2,500 of paid interest on your tax return. You’ll automatically receive a Form 1098-E, Student Loan Interest Statement from your school if you paid more than $600 in interest for the year. Once you’ve received all your tax documents, use ezTaxReturn to prepare your return. Most people can e-file in just 30 minutes.
Educator expenses deduction
Teachers tend to go above and beyond to ensure their students have everything they need. This often means dipping into their own pockets for supplies. If you haven’t already been reimbursed for your purchases, you may be able to get your money back when you file your taxes. Educators can deduct up to $250 ($500 for married couples if both parties are educators). Qualified expenses include books, supplies, computer equipment and fees paid to attend professional development courses.
Medical and dental expenses deduction
If you itemize, you can deduct the portion of your medical and dental bills that exceeds 7.5% of your adjusted gross income. You can deduct fees paid to your doctor or dentist, the cost of prescription glasses, hearing aids, transportation to appointments and things of that nature. However, funeral and burial costs are nondeductible as well as most cosmetic surgeries.
Mortgage interest deduction
Homeowners can save a lot of money on their taxes by claiming the mortgage interest deduction. The amount you can claim depends on when you purchased the property. Longtime homeowners can deduct the interest paid on mortgages up to $1 million. Meanwhile, those who bought their home after December 15, 2017 can only deduct the interest paid on mortgages up to $750,000.
Home office deduction
If you’ve spent the last few months working from home due to the pandemic, you may be wondering if you can deduct any of the expenses. The answer is probably not. Under the Tax Cuts and Jobs Act (TCJA), an employee’s home office expenses are nondeductible. However, you can claim the home office deduction if you’re self-employed and use the space regularly and exclusively for business. If your office also serves as a guest room or play area, you cannot claim the deduction.