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Rossen Reports: Use these tax deductions to get a bigger refund

Rossen Reports: Use these tax deductions to get a bigger refund
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Rossen Reports: Use these tax deductions to get a bigger refund
Whether you’re using a tax preparer or doing it yourself with a software program, your goal is to gather all the proof you have of your income and any tax-deductible expenses to get money back as a tax credit. Here are some of the main things you need to gather:Social security numbers for you, your spouse, and your dependents. Any forms sent to you in the mail from your employer, like a W-2 and a 1099. Contributions you’ve made to your retirement account and charity. Property taxes and mortgage interest information. Last year’s federal and state tax returns and taxes you had to pay.Here are some tax deductions you can try to cash in on. Child Tax Credit: For children below the age of 17, you can get up to $2,000 per child from the Child Tax Credit. Child and Dependent Care Credit: This one is meant to cover a percentage of costs for a child under the age of 13 (even daycare and summer camp). It also covers a spouse or parent unable to care for themselves or another dependent so you can work. The amount of the credit is a percentage of the amount of work-related expenses you paid to a care provider. The percentage depends on your adjusted gross income as well. Earned Income Tax Credit: This is a refundable tax break for low-income taxpayers. The credit ranges from $600 to $7,430, depending on how many kids you have (or don’t have), your marital status and your income. 401(k) Contributions: The limit for your 2023 taxes has gone up. You could contribute $23,000 and $30,500 for those 50 years and older. The IRS doesn’t tax what you divert directly from your paycheck into a 401(k). IRA Contributions: You can also deduct contributions to an IRA. How much depends on your income and whether you or your spouse are covered by a retirement plan with your employer. The limit on annual contributions to an IRA increased to $7,000 this year. Educator Expenses Deduction: Teachers and educators can deduct up to $300 on classroom supplies. Student Loan Interest Deduction: Whether you’re paying on your student loans or your child’s, you can write off up to $2,500 from your taxable income if you paid interest on your student loans in 2023. It’s not an itemized deduction, so it’s subtracted from your taxable income to save you money. This is for federal loans or private loans. This is for people with a modified adjusted gross income of less than $70,000. If you’re between $70,000 and $85,000, you can deduct less than that maximum of $2,500. Just remember, payments were frozen dating back to 2020, so if you didn’t make any payments in 2023, you probably don’t have an interest on the loans to make this deduction on your return.Electric Vehicle (EV) Tax Credit: This ranges from $3,750 to $7,500. You can get a credit of $4,000 for used EV cars. Where you are in this range depends on a few rules, like your income, the price of the vehicle, where the car was manufactured, and how the battery was assembled.Energy Efficient Home Improvement Tax Credits: If you’ve purchased qualifying home upgrades, such as energy-efficient windows, doors and heat pumps, you can get back up to $3,200 on those investments.Residential Clean Energy Credit: You might see this called the “solar tax credit.” You can get up to 30% of the installation cost of solar energy systems, including solar water heaters and solar panels on your house.

Whether you’re using a tax preparer or doing it yourself with a software program, your goal is to gather all the proof you have of your income and any tax-deductible expenses to get money back as a tax credit. Here are some of the main things you need to gather:

  • Social security numbers for you, your spouse, and your dependents.
  • Any forms sent to you in the mail from your employer, like a W-2 and a 1099.
  • Contributions you’ve made to your retirement account and charity.
  • Property taxes and mortgage interest information.
  • Last year’s federal and state tax returns and taxes you had to pay.
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Here are some tax deductions you can try to cash in on.

Child Tax Credit: For children below the age of 17, you can get up to $2,000 per child from the Child Tax Credit.

Child and Dependent Care Credit: This one is meant to cover a percentage of costs for a child under the age of 13 (even daycare and summer camp). It also covers a spouse or parent unable to care for themselves or another dependent so you can work. The amount of the credit is a percentage of the amount of work-related expenses you paid to a care provider. The percentage depends on your adjusted gross income as well.

Earned Income Tax Credit: This is a refundable tax break for low-income taxpayers. The credit ranges from $600 to $7,430, depending on how many kids you have (or don’t have), your marital status and your income.

401(k) Contributions: The limit for your 2023 taxes has gone up. You could contribute $23,000 and $30,500 for those 50 years and older. The IRS doesn’t tax what you divert directly from your paycheck into a 401(k).

IRA Contributions: You can also deduct contributions to an IRA. How much depends on your income and whether you or your spouse are covered by a retirement plan with your employer. The limit on annual contributions to an IRA increased to $7,000 this year.

Educator Expenses Deduction: Teachers and educators can deduct up to $300 on classroom supplies.

Student Loan Interest Deduction: Whether you’re paying on your student loans or your child’s, you can write off up to $2,500 from your taxable income if you paid interest on your student loans in 2023. It’s not an itemized deduction, so it’s subtracted from your taxable income to save you money. This is for federal loans or private loans. This is for people with a modified adjusted gross income of less than $70,000. If you’re between $70,000 and $85,000, you can deduct less than that maximum of $2,500. Just remember, payments were frozen dating back to 2020, so if you didn’t make any payments in 2023, you probably don’t have an interest on the loans to make this deduction on your return.

Electric Vehicle (EV) Tax Credit: This ranges from $3,750 to $7,500. You can get a credit of $4,000 for used EV cars. Where you are in this range depends on a few rules, like your income, the price of the vehicle, where the car was manufactured, and how the battery was assembled.

Energy Efficient Home Improvement Tax Credits: If you’ve purchased qualifying home upgrades, such as energy-efficient windows, doors and heat pumps, you can get back up to $3,200 on those investments.

Residential Clean Energy Credit: You might see this called the “solar tax credit.” You can get up to 30% of the installation cost of solar energy systems, including solar water heaters and solar panels on your house.