Maximize Your 2013 Tax Refund with these Tax Deductions & Credits

Maximize Your 2013 Tax Refund with these Tax Deductions & Credits

Credits & deductions available on your 2013 federal returns due April 15, 2014 include:

• Child Tax Credit (CTC) (Form 8812 to Form 1040, line 51) - CTC has been made permanent at $1,000 per child under age 17 at the end of the year.  This credit may be claimed in addition to the Child & Dependent Care Credit.
• Child & Dependent Care Credit (Form 2441 to Form 1040, line 48) - Maximum amount of child and dependent care expenses eligible for the credit is now $3,000 if you have one child and $6,000 if you have two or more children.  These amounts are permanent.
• Tuition & Fees Deduction (Form 1098-T to Form 8917 to Form 1040, line 34) - If you, your spouse or dependent is enrolled in a post secondary institution (college), you may be able to deduct tuition (up to $4,000) expenses as an adjustment to income, even if you don't itemize deductions. You generally take this deduction if you don't qualify for an education credit. (No double benefit allowed).
• American Opportunity Tax Credit (Form 8863 to Form 1040, line 49) - Maximum credit for the first four years of post secondary education (college) costs in a degree or certificate program is $2,500 per student. Costs may include tuition, fees and course materials (books).  If you owe no tax, you may also be eligible to receive up to 40% of the credit ($1,000) as a refund.
• Lifetime Learning Credit (Form 8863 to Form 1040, line 49) - Tax credit for any person who takes college classes. It provides a tax credit of 20% of tuition expenses, with a maximum of $2,000 in tax credits on the first $10,000 of college tuition expenses. You can claim the Lifetime Learning Credit on your tax return if you, your spouse, or your dependents are enrolled at an eligible educational institution and you were responsible for paying college expenses. Unlike the American Opportunity credit, you need not be in the first four years of undergraduate classes. Even if you took only one class, you may take advantage of the Lifetime Learning Credit.
• Educator Expenses Elementary and secondary educators can deduct up to $250 in related job expenses as an adjustment to income, even if not itemizing.  Educator expenses are not reduced by 2% of AGI, contrasting to most other employee expenses.
• Deduction for mortgage insurance premiums (PMI) (Form 1040, Sch A) If you pay mortgage insurance premiums, aka (PMI), you may be able to deduct these premiums as mortgage interest.
• Alternative Minimum Tax (AMT) (Form 6251) AMT was enacted by Congress (TRA1969) imposing a nearly "flat rate" (26%/28%) on an adjusted amount of taxable income above a certain threshold (exemption) to ensure wealthy taxpayers receiving large tax benefits pay "some" tax. AMT will now be adjusted for inflation each year so fewer people are subject to the AMT. The exemption amount for 2013 is $51,900 single, $80,800 married and $40,400 married filing separate.
• Adoption credit (Form 8839) you may qualify for a credit up to $12,970 of your adoption expenses including fees, court costs, attorney fees, traveling expense and other expenses directly related to and for the principal purpose of the legal adoption of a child. If your employer provides adoption benefits, you may be able to exclude up to the same amount from your income. Both a credit and exclusion may be claimed for the same adoption (child) by not for the same expense (child).
• State & Local sales tax deduction (Form 1040, Sch A) For 2013, you may deduct state & local sales tax in lieu of state income tax. You can take a deduction for state & local sales tax, or a deduction for state income tax, but not both.
• Learn more about these deductions and credits at irs.gov and file your income taxes!