April 15th has gotten a bad name, but in reality, tax time can be looked at as a good time for many. It’s true, some people will owe a large amount of taxes, but the average everyday person is most likely looking at a nice refund. If you’re in need of a car, your refund might just be the way to get one. Since many dealerships require a small down payment and you’ll need to fund other initial costs, a refund is that chunk of money you’re looking for. In fact, do your taxes right and you can often optimize that number to an even better bigger amount. Here are some surprising deductions and ways to maximize your 2016 tax refund and get into a new ride.
Homeowner, Rental and Home-Related Deductions
Just by owning a home or renting, you are able to deduct some of your expenses. Homeowners can deduct all interest paid on their mortgage. If you’re a renter and live in specific states, you may have a deduction or credit.
Other home-related expenses to deduct are home improvement upgrades that make your home more energy efficient or environmentally friendly. Right now, the government is offering all sorts of rebates, credits and deductions for people who have a passion for the Earth. Texas has a site that gives you even more insight as to what’s available to you.
The last major source of home-related deductions are for people that work at home or run a home-based business. It doesn’t matter whether you rent or own, you can deduct portions of mortgage/rent by using a simple formula and the square footage dedicated to your work. Phone lines, fax and equipment is usually deductible as well.
Children and Childcare
Children are one of the best things that can happen to you. They bring joy and a lot of personal growth. They are also an excellent source of deductions. In addition to the child tax credit, you may be able to deduct childcare expenses. Don’t forget that if you care for elderly family members, they bring some deductions too.
Work and Job Hunting
Jobs often create costs that you wouldn’t normally incur. It’s surprising how many of the expenses can be written off. Some things to look at are uniforms, union dues, mileage to meet clients or using your personal vehicle for work-related tasks, laptops and other random out-of-pocket expenses.
Many job hunting expenses can also be deducted. Some things to look at include costs of resumes and postage, employment agency fees, phone fees, job counseling and a limited amount of travel to out-of-town interviews.
Medical Expenses: Doctor, Dental, Vision
As long as your medical services aren’t cosmetic in nature (yes, that means BOTOX treatments), almost all medical payments can be deducted. This typically includes insurance premiums, out-of-pocket costs, transportation to and from appointments and prescription drugs. The caveat is they must be itemized and exceed 10% of your income.
Education
Getting an education costs serious money these days, which is why deductions can make a difference. You may be eligible for learning credits, tuition expenses, books and supplies, room and board and loan interest. Sometimes it pays to get smarter. Use that schooling to find out where you can maximize your return.
Giving and Volunteering
Doing good in the world is another wonderful source for deductions. Not only are you enriching the lives of others, you may be able to get a better refund. Deductions often involve monetary donations, value of clothes and household goods given, mileage used when traveling for charitable purposes and expenses you paid on behalf of a charity.
How to Find Deductions
The key to finding deductions you can utilize is to do some minor research in each category and look at what’s possible to deduct in your state. For example, search ‘homeowner tax deductions Texas’ or ‘school tax deductions Texas’. The internet is a wealth of information that can assist you in maximizing your refund. Don’t forget to take advantage of the numerous free sites that will help you file taxes. The top-rated free programs will ask a multitude of questions that get you the maximum amount of refunds. Some of the highest rated free tax filing websites are:
Once the cash is in the bank, you’ll be well on your way to finding and buying a new ride—so why wait until April 15th—get started on your taxes now.
