As we all gear up for tax season, Plains Tax Strategies’ Terri Brechter, Director of Tax, shares a few ways that you can lower taxes.

Tax Credits (Most Favorable) for Household Members

Do you pay expenses for childcare for a child under 13 in your household?  The Child and Dependent Care Credit is a tax credit that can reduce your taxes.  You will need the expenses paid to a childcare provider and the taxpayer identification number for the provider.  Most childcare providers have a form ready to provide to you.

Have children under 17 living with you?  You may be eligible to claim a Child Tax Credit for each qualifying child under the age of 17 (within income limits) of up to $2,000 per child.  

Still support a child in college or an adult living with you?  The credit changes names to a Credit for Other Dependents and is up to $500 per individual.  Find the eligibility requirements here. 

Did you adopt or begin the adoption process in 2023?  Look at the Adoption Credit.  Read more about the qualifications and limitations here. 

Tax Credits (Most Favorable) for Households

If you made energy-efficient improvements to your home in 2023, you may be eligible for a tax credit of up to $1,200. To claim the Energy Efficient Home Improvement Credit, you’ll have to file this form with your return.

There’s also a potential $150 credit if you submit a home energy audit report. New in 2024, the audit must be completed by a certified home energy auditor.

Finally, if you purchased a “clean” vehicle in 2023, you may qualify for a tax credit of up to $7,500. However, the requirements for clean vehicle eligibility have recently changed, so be sure your vehicle qualifies. 

Deductions by Profession

Work in education?  If you’re a K-12 teacher, principal, or aide, you can claim a deduction for unreimbursed expenses for materials in the classroom or development courses of up to $300. 

Have your own business? If you use your home for business, that can be deductible.  Two methods are available. See which would work best for you here. Mileage expenses are also deductible at 65.5 cents per mile in 2023 and 67 cents per mile in 2024. 

Itemized vs. Standard Deduction

The standard deduction has greatly increased with recent legislation to the point itemizing in no longer advantageous to most people.  Singles get $13,850, married filing joint $27,700.and head of household $20,800 without gathering receipts.  Don’t forget 65 and older have an additional amount.

Itemized deductions are still available if your expenses are above the standard deduction amounts.  Gather the receipts for mortgage interest, property taxes, charitable deductions, and large medical or dental expenses.

Visit the IRS website for the full list of credits and deductions for which you might qualify.