With all of the rush to get our taxes finished on time, it can be easy to overlook possible deductions and ways to reduce your overall tab.
BE.com caught up with Barbara Weltman, a tax expert and spokesperson for one of the most popular tax guides in the United States, J.K. Lasser’s Your Income Tax 2016.
Weltman shared the following last minute tips:
1. Contribute to your IRA if eligible to build retirement savings and cut
taxes. A deductible contribution lowers your adjusted gross income, which
increases eligibility for other deductions and tax credits. The contribution
for 2015 must be made by April 18, even if you get an extension of time to
file your 2015 return.
2. Review your premium tax credit. If you received this government subsidy
for health coverage purchased through the Marketplace, make sure the amount
of the credit is correct. You may be entitled to an additional credit, or
owe the government money. Or you may be eligible for the credit now even if
you didn’t qualify when you bought your coverage. Complete Form 8962 to
determine your correct credit amount.
3. Determine which parent gets tax breaks for a child. When parents split
up, usually the custodial parent is entitled to the exemption and other tax
breaks related to the child. If this parent wants the other parent to get
these breaks (e.g., it’s required by a divorce decree, it saves the family
money), be sure to sign Form 8332.