While you’d be hard-pressed to find anyone who claims to love tax season, there are certainly a few ways you can make it a little less painful on yourself—and, on your wallet. Being in-the-know on how to maximize your returns and staying educated about the often-overwhelming ins and outs of the national tax system can end up saving you stress, time and money.
That includes knowing which tax credits you could be eligible for. Tax credits are dollar amounts that can be applied to the amount you owe the IRS, meaning you end up paying less. Sounds pretty good right?
There is a bundle of tax credit options out there that apply to distinct situations for individuals, families, business owners and more, from state to federal levels. Here are a few that just might work for you; to see if you qualify, ask yourself these questions about the past year:
Did you make some green renovations to your home?
Yes? Congratulations! Not only are you making a great move for the environment, you also may be opening yourself up to some sweet tax-related benefits. Those include tax credits equal to a percentage of the cost of any solar photovoltaic systems. (There are both federal and state tax credits for PV systems, which cover different percentages of the system’s cost.) You can also score a tax credit for a percentage of the costs of any solar fans and solar hot water systems you installed in your home. (Electric vehicles can also get you a tax credit! Check to see if your new wheels apply.)
Did you buy a house?
The mortgage tax deduction, while not a credit (the deduction happens before you total up how much you owe the IRS, not after), can take a big chunk out of how much you end up having to pay. Another option to look into, however, is a mortgage credit certificate, which functions in a similar way to tax credits, and is based on a portion of your mortgage interest.
Do you qualify as a low-income property owner?
To get this Hawaii real property tax credit, first, your household income needs to be $60,000 per year or less. In addition, the property in question needs to be the owner’s sole property, and a home exemption needs to already be in place. If this sounds like it could fit your family, put in an application at any satellite city hall. This exemption needs to be applied for and accepted before you can actually use it on your tax return.
Did your family expand?
That could include anything from getting married to having children to adopting. Getting married and filing jointly can usually net a noticeable chunk of change. Under the adoptee tax credit, adopting a qualifying child, such as one with special needs who cannot care for him or herself, would warrant a tax credit per child. Others are circumstantial, such as the Child and Dependent Care tax credit, which applies to family-related expenses (that would go toward caring for a child under 13 years old) if you are in the process of looking for a job.
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