Today is the last day to file for the 2015 tax year. Taxes for many is a daunting task and often confusing with all the newest changes in the tax code. Saving money is a tough effort and becoming more aware of avenues to help your tax returns is very important to your financial planning and management. In today’s post I share some reminders on how to capture last minute money savings tips when filing today.
1. IRA money added earlier this year can be counted in 2015. This is one of the few last minute money moves you can make and it can count today. This is helpful for the self-employed and those working in full time employment capacities that also contribute. Super Tax tip: You can even open a new account now and still get this benefit. Note: Roth IRA and the Traditional IRA are not the same. Roth is not deductible because it is funded after tax. Traditional IRA is deductible and depending on your contribution filing status, you can expect a deduction to reflect your adjusted gross income.
2. Child and Education Tax credits are huge and should not be overlooked. Be sure to capture yours, they are there to maximize your ability to take better care of your family and yourself while seeking an education. $6,269 is available to you as long as you can claim three or more children who qualify under 2016 EITC or Earned Income Tax Credit. $5,572 with two children who qualify.
The American Opportunity Tax Credit is a great incentive to help families save on education investment. The rising costs of education loans for many families is real and any help can be a tremendous benefit. $2,500 per student can be claimed at 100% of the first year of costs in college and then the following year 25% of the next $2000 can be claimed. These credits can be a great help for runaway expenses like books and supplies. Be sure to check the IRS website for more information.
3. Dependent Care and Child Tax Benefit is an amazing incentive for families that have someone in care that is dependent for life. Our aging care population is growing and more often than not, a family member is carrying a huge responsibility to sustain the care and well-being for someone unable to do it for themselves. The new credit is now 30% to 35% for 2015 tax year. Be sure to claim yours and not overlook this important benefit.
4. Tuition can be deducted. School is incredibly expensive as we know and if your concentrating on a graduate degree and still working, this tax credit can help you reduce your tax liability. Deductions can be as high as $4,000 for higher education and qualifying fees for you, your spouse and any of your dependents.
5. Student Loan Interest is also deductible and can also save you tons of money. $2,500 can be deducted and that is a very nice tax break. There are some income qualifiers that must be met which for this year is $65,000 is the maximum income for a single person and $130,000 for those that file jointly.
Filing on the last day can be traumatic when not sure all the areas that should be captured when seeking to save money. Families are busier than ever and often can overlook some of the deductions shared here or they are filing their own returns and need a reminder of the more recent changes.