Tips for Taxes

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  • Take advantage of health care reductions.

    You may be able to deduct expenses you paid during the past filing year for medical care—including dental—for yourself, your spouse, and your dependents.

  • Earned Income Tax Credit.

    Workers who earn $48,362 or less a year qualify for this tax credit, which may result in a tax credit/refund of up to $5,666.

  • Being a parent has tax advantages.

    As a parent you may qualify for a number of tax benefits. Amongst these are the Child Tax Credit, Child and Dependent Care Tax Credit, Adoption Credit, Higher Education Credit, as well as the ability to claim a deduction for each of your children.

  • Tips are Taxable.

    Tips are subject to federal income, Social Security, and Medicare taxes.

  • The American Opportunity Credit.

    This credit, which can be up to $2,500 per student, can be claimed for each of the first four years of post-secondary education. You will be able to receive up to $1,000 of this even if you earn no income. Eligibility is limited to taxpayers who make less than $80,000 ($160,000 for married couples).

  • Lifetime Learning Credit.

    This credit, which can amount to a maximum of $2,000 per eligible student, is available for all years of postsecondary education. The maximum is also limited to the amount of tax you must pay, and does not require the student to be pursuing a degree. The credit is available to students who make less than $60,000 per year.

  • Keep it simple.

    When filing your return, be sure to choose the simplest tax form for your situation. Guides on which return to use can be found on the IRS website.

  • First-Time Homebuyer Credit.

    If you closed on a house in the past filing year, you may be eligible for a tax deduction of up to $8,000 (filing jointly) or $4,000 (filing separately). Be sure to take advantage of it!

  • Save for retirement and get credit.

    You may be eligible for a tax credit if you make eligible contributions to an employer-sponsored retirement plan or to an individual retirement plan. The credit can amount to $1000 if filing separately or $2000 if filing jointly.

  • Capital Loss Deductions.

    If your capital losses exceed capital gains, the net loss can be deducted from your taxes with an annual limit of $1500 if filing separately or $3000 if married.

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