Trendy tricks to save on taxes

Author: Joseph Raspolich
Published: Feb 13 2014

The 2014 tax filing season had a less than speedy start thanks in part to the government shutdown which took place last October. As a result of the gridlock, the Internal Revenue Service (IRS) was forced to delay the acceptance of tax returns and consequent operations. Albeit a bigger hassle than usual, it’s essential to complete your tax returns in line with the guidelines specified. On the bright side, there are a few tricks you can employ to get a substantial refund regardless of these speed bumps.

"Go Green"

Who knew that Uncle Sam cared so much about the environment? In an effort to promote environmental awareness and simultaneously save you money, the IRS allows you to claim up to 30 percent of your home’s energy saving appliances through December 31, 2016. Although these are restricted to your ‘main home,’ these improvements include solar panels, solar-powered water heaters, geothermal heat pumps, and small wind energy systems.

To file for these credits you’ll need to submit Form 5695, titled Residential Energy Credits.

Side note: the 30 percent tax credit includes the cost of labor or installation.

Dig for those Deductions

Determining which deductions you’re eligible to claim can be difficult if you do not have a clear starting point. Let’s take it from the beginning.

What’s your filing status? There are five different categories of filing statuses which each come with their own tax rates and standard deduction amounts (married filing jointly, married filing separately, single, head of household, and qualifying widow or widower with a dependent child). The easiest way to determine which category you fall into is to take the five minute filing status quiz, courtesy of IRS.gov.

There are also a number of tax exemptions available if you claim dependents. As of 2013, each qualifying child could earn you up to $3,900. The law isn’t limited to blood relatives either. You could include a stepchild, foster child, sibling, step-sibling or even a grandchild.

Assess which other areas of your life may include deductible expenses. For example, if you’re in the process of seeking employment, you may be able to deduct these expense (business cards, travel charges, etc.) Investments and charitable donations can also qualify as deductions. Whether it’s just a small, out-of-pocket tithing or a larger itemized investment, it could equate to big savings on your return.

The last major deduction to consider may be staring you right in the face. The interest a homeowner pays on their mortgage (up to one million dollars) can be deducted from your income taxes if you itemize. If you’re unsure which of the aforementioned deductions you may be able to receive, consult levytaxhelp.com. Their team of tax professionals are proficient in the U.S tax codes and regulations.

Increase Withholdings

A sure-fire way to get more money back in your return is to increase the amount of your withheld income. It’s as simple as contacting your boss or human resource department and resubmitting a W-4 form. In essence you’re basically postponing the receipt of your weekly checks into one larger return. Recruit the help of a tax professional to learn even more ways to save on your taxes this season.

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