Are you paying Uncle Sam too much?
Overlooked tax deductions can cost you money
As the 2014 tax season moves into its final weeks, many of you could feeling overwhelmed when you think about all those forms to fill out.
"I think that for myself, and I think it's true of many people they have a fear of filling in the wrong numbers in the wrong boxes and making a mistake," said taxpayer Eric Alexander.
In addition to general intimidation, some taxpayers worry about missing credits or deductions that might save them some money. "I'm sure there's a lot of deductions, but you have to really dig to find them," taxpayer Chris Lanigan told Ruth to the Rescue.
Pointing You Toward Deductions
Since each taxpayers situation is different, it's hard to say exactly which deductions might help you. However, Ruth to the Rescue can point you in the direction of some commonly missed deductions. The consumer unit checked with a tax advisor at H&R Block to see which deductions are often overlooked.
The first item she focused on comes right at the beginning of your 1040, your filing status. "Each filing status has its own set of rules and even though it's something that seems simple, a lot of people make a mistake when they choose their filing status," said Jennifer Owens of H&R Block. That means you should review the benefits of each status, and find out which choice will give you the biggest payoff.
Owens continued, "The second thing that people miss a lot is the Earned Income Tax Credit. The earned income tax credit is really critical for a lot of working class Americans."
The Earned Income Tax Credit is awarded to those who file earning low to moderate income. For example, Owens says the maximum someone with three children could earn is $51,567. If you qualify, you can earn a credit of around $6,000, determined by income and number of dependents. Owens says, one in five taxpayers overlook this deduction.
The final item on Owens' list of top three most-missed deduction are education credits. The H&R Block tax advisor says there are three education-related credits: The American Opportunity Tax Credit, The Lifetime Learning Credit, and the Tuition and Fees Deduction, which can be worth $4,000.
If you think you qualify for the Tuition and Fees Deduction, be sure to claim it this year. "Unfortunately, that's one of the deductions that expired as of December 31st 2013. So, this is the last time you can take advantage of the tuition and fees deduction," warned Jennifer Owens of H&R Block.
Other Missed Deductions To Consider
If those deductions don't apply to you, experts say there are others you should investigate to make sure you're not paying more taxes than necessary.
1) Charitable contributions
2) State and sale tax deductions
3) Job Search Expenses
4) Retirement saver's credit
5) Gambling losses
As always read the fine print to make sure you qualify, or discuss your situation with your tax professional. Also, keep all necessary documents and proof in case you ever face questions from the IRS.
Copyright 2014 by ClickOnDetroit.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.