Tax Refunds & Advice

Are you looking for any and every tax break imaginable? If not, you should be. The more tax breaks you find the less money you will owe. And that is what you want, right? With so many common tax breaks there is no good reason to pass any of them by. They are well known, and you can find plenty of information on them as long as you know where to look.

Here is a list of common deductions and credits that will lower your tax liability:

1. Alimony
2. Child care
3. Mortgage interest
4. Education credits
5. IRA’s
6. Earned income credit
7. Student loan interest
8. Relocation expenses

How many of these deductions or credits do you qualify for? Remember, you can take advantage of many of these; there is no restriction. The only problem you may face is determining whether or not you qualify. If you are unsure it is better to find the right answer than to guess. You don’t want to use one of the above just to learn that you were not eligible. The same holds true if you decide against one that you could have taken advantage of.

These common tax breaks may or may not work for you. If you hire a tax professional he can give you information on the above, as well as any others that you may be able to use. One deduction or credit is better than none at all. By using them you ensure yourself of owing less taxes. 

If you have children you might as well take advantage of this when it comes time to filing your income tax return. After all, you pay enough to take care of your child that getting something in return is your right. That being said, you need to know the ins and outs of the child tax credit. You want to make sure that you qualify for this credit.

Generally speaking, you can take a child tax credit of up to $1k per child. The qualifications for the child tax credit include: a qualifying child must be under the age of 17, and your adjusted gross income cannot be above a certain limit.

More information on a qualifying child includes:

1. At the end of the tax year the child must have been age 16 or younger.

2. A United States citizen.

3. Claimed as a dependent. You can also file Form 8901 for children who qualify and cannot be considered a dependent.

4. Must be your biological child, or related to you by marriage or adoption.

But what about the income limit? Do I make too much money to take advantage of the child tax credit?

1. The child tax credit begins to phase out if your modified adjusted gross income is more than $75k when filing single.

2. When married filing jointly the income level is $110k.

3. When married filing separately the income level is $55k.

If your income is above these levels it does not mean that you are disqualified from receiving the child tax credit. Instead, you need to use Publication 972 Child Tax Credit to determine how much of a credit you can take.

There are some requirements that govern the child tax credit, and you should be aware of them when filing your final return.

Are you making upgrades to your home? If so, you might as well look into those that can reduce your taxes as well. The IRS website states:

“Individuals can make energy-conscious purchases that will provide tax benefits when filling out their tax returns next year. The new law provides tax credits for making your principal residence, which must be in the United States, more energy efficient and for buying certain energy efficient items.”

By installing energy-efficient upgrades to your home before the end of 2009 you will be able to take advantage of tax credits. Also, keep in mind that the upgrades you make should be expected to stay in your home for at least five years.

What types of home improvements and upgrades qualify for energy-efficient tax credits? Here is a short list:

1. Insulation
2. Exterior windows and doors
3. Central heating and/or air conditioning
4. Geothermal heat system
5. Storm windows

Upgrading your home is a great idea. This can help to keep your property looking good, while also ensuring that it stays in great condition as the years go by. If you are thinking about making upgrades before the end of 2009 consider those that qualify as energy-efficient tax credits. This will go a long way in reducing your tax liability, and making you a happy person when it comes time to file your final return.