When it comes to tax season, things can get stressful fast. You may worry about how much money you will owe and whether you will remember to file in time. The one thing you don't want to do is forget to take advantage of tax deductions. This is a great way to lower your tax bill. Here are some tax deductions and credits that you won't want to ignore as you begin to think about preparing your taxes:
Student Loan Interest
If you're still making payments on your student loans, you'll want to take advantage of the chance to deduct student loan interest. You can deduct up to $2,500 of student loan interest payments. This is a great way to save while you continue to work towards paying off your student loan debt.
Earned Income Tax Credit
Another deduction that you won't want to miss out on is the Earned Income Tax Credit or EITC. If you're living on a lower to moderate-income, you may be eligible for this deduction. If you lost your job or took a pay cut, you may also be eligible. This can help you trim your tax bill.
If you've been contributing to retirement accounts, make sure that you look into the retirement savings contribution credit. This is eligible to individuals who contributed to a Roth IRA, IRA, or 401(k) and you'll be able to get a percentage in credit.
If you've been paying for child care, you'll want to check out the Child and Dependent Care Tax Credit. This will allow you to claim a percentage of the fees that you've paid for your child's care. Since childcare is an extremely expensive cost, you want to make sure that you take advantage of this.
If you've been going to school and working on your education, you may be eligible for education credits. In order to qualify, you need to have paid for qualified higher education fees, like tuition and enrollment expenses. College is not cheap, so make sure that you don't miss out on this credit.
Make sure that you maximize your tax deductions and credits so that you're not overpaying come tax time. If you have any tax questions or if you need help preparing and filing your taxes, reach out to a tax preparation service. They're there to help you so that you're not making poor financial and tax decisions.