Check for overlooked home, education tax credits

Here are ways to cut taxes through tricks you might have overlooked.
Zillow
Jan 22, 2014

 

By S.E. Slack

There’s no cheery way to say this: It’s not just the new year, it’s tax time again. Now that your depression is back, let’s find a few ways to cut your taxes to the bone through some tricks that you might have overlooked.

Are your kids heading down the Ohio River to the lush bluegrass-lined neighborhoods of Louisville for college? Or are you attending college right here in town? Either way, there are credits that can be applied. According to Kiplinger, the American Opportunity Credit is based on 100 percent of the first $2,000 spent on qualifying college expenses and 25 percent of the next $2,000 for a maximum annual credit per student of $2,500.

There is also the Lifetime Learning Credit, which can be claimed for any number of years to offset the costs of higher education for you, your spouse and your kids. Worth up to $2,000 annually, it can be used for post-high school classes that are designed to help people find new jobs skills or improve the skills they currently have.

For those who travel often on business, don’t overlook airline fees for baggage and changing travel plans. You can add these costs to deductible travel expenses.

Homeowners can still take advantage of a $500 energy-saving tax credit if they have made improvements to their home, such as the addition of new windows or insulation. For those who installed qualified energy equipment, like solar water heaters, as much as 30 percent of the total cost can be claimed.

New retirees should take note of key exception for them, too. Because most people pay taxes through withholding from a paycheck, many new retirees aren’t aware that they must start paying estimated quarterly payments. If they don’t, they can be tapped with a $1,000 penalty.

A little-known exception allows taxpayers age 62 and older in the year they retire and the following year to request a waiver of the penalty. Look into these tips and more at the IRS website.