Five Overlooked Tax Credits and Deductions
Previous

If you miss these credits and deductions, you might be overpaying on your taxes.

Taxpayers often miss the money-saving tax deductions and credits they’re entitled to because people don’t realize they’re available, says Zane Christopher Jr., Board of Director Member of TaxSlayer LLC. Before you file your taxes this year, consider these five tax credits and deductions you may be overlooking.

1. Education Tax Credits and Deductions

If you’re a college undergraduate, you can probably take advantage of the American Opportunity Tax Credit, which is a tax credit of up to $2,500 for tuition and fees, books, and course materials. Additionally, 40 percent of the tax credit – up to $1,000 – is refundable.  

If you don’t qualify for this tax credit, you can likely claim the tuition and fees deduction, which is available to undergraduates, graduate students, and working professionals taking continuing education coursework. This tax deduction is up to $4,000 for education expenses for you, your spouse, or your dependents. Even if you took only one course, you can deduct the cost as long as it was at an accredited college, university, or vocational school.

If you took almost any postsecondary course this year, the Lifetime Learning Credit usually applies to tuition and mandatory enrollment fees. It is 20 percent of the first $10,000 of eligible expenses, up to a maximum of $2,000.

2. Gambling Losses Deduction

Did you lose money that weekend in Vegas? If you itemize deductions on your tax return, you can deduct your gambling losses, but there’s a catch: Your gambling losses cannot exceed your gambling winnings, which must be reported as income. For example, if you won $1,000 but lost $2,000, your deduction is limited to $1,000.

3. Child and Dependent Care Tax Credit

Do you have a child in childcare? Many parents can write off at least a portion of the cost of childcare thanks to the Child and Dependent Care Tax Credit. You can claim the tax credit — worth up to a maximum of $3,000 for one qualifying dependent or $6,000 for two or more qualifying dependents — if you pay someone to care for your dependent while you work or look for work.

4. Dependent Exemption

Do you care for aging or sick parents or grandparents? Any of these may be claimed as tax exemptions on your tax return. In order to qualify as your dependent — entitling you to a $4,050 tax exemption — a person must: 

  • be either a relative or a full-time member of your household; 
  • be a citizen or resident of the U.S., or a resident of Canada or Mexico;
  • not file a joint income tax return with anyone else;
  • receive over half of his or her support from you; and,
  • have less than $4,050 of gross income.
     

5. Business Tax Deductions

Do you have a business? If you identify as a business owner, you can deduct the costs associated with running your company. The sharing economy is a prime example. If you’re a part-time Uber driver, you may be able to deduct relevant costs — repairs and regular maintenance, for instance. If you use your car for personal use as well, you’ll be able to deduct a percentage of your expenses based on mileage. To qualify as a business for tax purposes, your activities must generate income and be conducted for profit.

By keeping track of what you spend on a daily basis, you can unlock a slew of credits and deductions to minimize what you owe when tax time comes around. Gain additional tax-saving tips , or learn more about filing your taxes in the Regions Tax Center.

Next

On a scale from 1 to 5, with 1 being 'Not Good' and 5 being 'Excellent', how would you rate this article?

Press enter to submit your rating

Rate this Article

Use this form to provide additional feedback based on the rating you provided.

Thanks for Rating

Would you like to provide feedback?

Thanks for your feedback!

This information is general in nature and is not intended to be legal, tax, or financial advice. Although Regions believes this information to be accurate, it cannot ensure that it will remain up to date. Statements or opinions of individuals referenced herein are their own—not Regions'. Consult an appropriate professional concerning your specific situation and irs.gov for current tax rules. Regions, the Regions logo, and the LifeGreen bike are registered trademarks of Regions Bank. The LifeGreen color is a trademark of Regions Bank.

2018 TaxSlayer LLC and Regions Bank. Regions Bank is pleased to make TaxSlayer services available to our customers. Regions Bank does not provide the product or service and makes no representations or warranties regarding your use of TaxSlayer. See taxslayer.com for details and limitations on TaxSlayer’s Guaranteed Maximum Refund. TaxSlayer and other related marks are registered trademarks of TaxSlayer LLC and should not be used or reproduced without consent.