Tax filing season is among us. For many, this conjures up feelings of dread. But, money can be saved. Frequently tax credits and deductions are overlooked, costing you money in extra taxes. The Orlando Sentinel reports last year Florida taxpayers missed out on $1.1 billion. Tax credits are typically better than deductions. In fact, deductions reduce your taxable income while credits reduce your taxes.
“Identifying which tax credits you are qualified for can keep money in your wallet,” says Dustyn Shroff, Vice President of GreatFlorida Insurance, Florida’s largest independent renters insurance agency.
Tax experts agree, the Earned Income Tax Credit is one of the most overlooked tax credits. The IRS estimates last year 26 million people received about $65.6 billion under this credit. The average amount received was $2,455 but, it can be worth up to $6,000. Yet, one out of every five workers in the U.S. who is eligible doesn’t take advantage of it.
The credit is available for filers between the ages of 25-64. Eligibility and the amount of the credit are based on adjusted gross income, earned income and investment income. Also, those who are self-employed and own or operate their own business could qualify. Anyone earning less than $54,000 a year should look into this underused tax break.
“Because financial situations change from year-to-year, it is could to check eligibility annually,” reminds Dustyn Shroff, Vice President of GreatFlorida Insurance, Florida’s top independent renters insurance agency.
Keep in mind, not all tax credits are for middle to low income families. Another forgotten credit is the Child Dependent Care Credit. You can claim this credit regardless of your income. The amount of the credit is based on how much you spend for child and dependent care and your income. If you are paying someone to care for your children or while you work, or look for work you might be eligible. The credit is also available for the cost of caring for a spouse or another person in your household of any age who is physically or mentally incapable of self-care.
The Child Dependent Care Credit returns a portion of the money you spend on care and can reduce your tax bill significantly. According to financial management company Intuit, the credit provides up to 35 percent of qualifying expenses, depending on adjusted gross income.
To see if you qualify for these or additional tax credits check out the IRS website.
Contact GreatFlorida Insurance a call if you are looking for affordable and dependable renters insurance.
