Let's face it, the only reason you really look forward to tax return season is because you usually receive a nice little refund. However, in recent years it seems that for many people their refund has shrunk over time. What many people don't know is that there are still many deductions that could increase their tax refund greatly. At Auto Credit Express, we want to help you get the most worth out of every situation. So we've gathered together tax deductions that could increase your refund this year.
8 Commonly Overlooked Tax Deductions
1.Charitable Non Cash Contributions
Clothes, furniture, appliances, etc. Any items like these that you donated to places like Goodwill or Salvation Army can be deducted from your tax return. Make sure you receive a receipt of your donated items in case of an audit. Alternatively, you can keep an itemized list of the items donated and their market worth.
2. Points On Refinancing
Since interest rates have remained low the past few years, many homeowners have refinanced their homes. The points you pay to refinance your home can be deducted on a monthly basis from your return.
3. Old Points On Refinancing
All points not written off on an old refinancing are deducted in the year of a new refinancing. For example, 'let's say you refinanced on June 1, 2010, and paid $2,400 in points. You refinanced again on June 1, 2011. You can deduct all the remaining points on the 2010 loan on your 2011 return. That's $2,280 plus the $50 you could deduct for January through May 2011.'
4. Health Insurance Premiums
Premiums that you pay may potentially be deductible. Medical expenses that exceed 7.5% of your Adjusted Gross Income (AGI) can give you tax benefits.
If you are self employed, you can deduct 100% of your health care premium and you do not have to worry about itemizing.
5. Educator Expenses
If you are a qualified educator or teacher, you can deduct up to $250 of the materials you have purchased for your teaching purposes. And better still, you don't have to itemize.
6. Energy Savings Credit
Homeowners who install alternative energy equipment, such as solar water heaters, geothermal heat pumps and wind turbines, can take a credit of 30% of the total cost, with no cap through 2016.
7. Investment and Tax Expenses
These expenses are often forgotten because they have to be itemized under miscellaneous items. Fees such as what you pay your broker or for your IRA can all be used for a deduction if they are more than 2% of your AGI.
8. Casualty Deductions
Every year it seems there is some event that causes an area to be classified as a disaster area. If you live in one of these areas, you can claim your loss. Make sure you use the correct form though.
As We See It
Though it may take a little extra work, there are many deductibles you can add to your tax return for a healthy refund. A larger refund is a great tool to have when you need to replace your vehicle. Apply using our online application and we will find dealers that are able to help despite what your past credit history may look like. Even if you put as little as $500 down on a new or used car, truck or SUV, you may find that you'll be able to drive away with the vehicle you and your family need today!