Once again, tax season is upon us. And like many Americans, you may be overlooking tax deductions and credits that could put money back into your wallet.
According to TurboTax, more than 45 million people itemized tax deductions on their 1040s. That means individuals claimed a whopping $1.2 trillion worth of tax deductions. Below is a list of commonly overlooked deductions and credits that can help you reap a share of the reward.
Out-of-pocket charitable deductions
Most Americans are familiar with the fact that charitable donations qualify as deductions, and report them accordingly. However, it’s the little things that often go unnoticed. Groceries provided to a local soup kitchen or materials donated to a school fundraiser can also be deducted according to Kiplinger. If you transport a patient to their treatment center for the American Cancer Society, 14 cents for each mile driven can be deducted.
These seemingly small contributions mean a lot to those in need and could add up to worthwhile deductions on your 2017 taxes.
Under the new tax reform laws, childcare credits may be up to twice as much as previous years. According to Forbes, the Child Tax Credit may be worth as much as $2,000 in tax credit per qualifying child depending upon your income.
To take advantage of this particular tax credit there are specific stipulations. For example, the qualifying child:
- must be under 17 (age 16 or younger) at the end of the tax year,
- must be claimed as a dependent on your federal tax return,
- can’t have provided more than half of their own support, and
- must have lived with you for the majority of 2017
There is additional criteria that must be met in order to receive the Child Tax Credit. The IRS offers an online tool to help determine if you qualify.
Credit for the elderly or disabled
If by the end of the tax year you are 65 or older, or retired on permanent and total disability and you received taxable disability income, you may qualify for credit. According to Money Crashers, the maximum amount of the credit for the elderly or disabled is $1,125 and is based on 15 percent of an amount determined by completing Schedule R on your tax return. However, because this is considered a nonrefundable credit, meaning it can reduce your tax liability, there are specific income limits to qualify.
Tax season can be daunting, but by understanding the credits and deductions you qualify for, it doesn’t have to be so difficult.