Time is zipping by us quickly. As you contemplate getting your tax return done, there may be a few deductions that you can take advantage of. Here are a few that you may want to make note of.
Student loan interest – with the plethora of student loans out there, some folks are not aware that you can deduct student loan interest on your return. There are income limitations, but for many young people this deduction will be allowable.
Mileage deduction – If you have a second job, you can deduct mileage for travel from one job to the other. You cannot travel from home to the second job, only from your primary job. The miles that you travel add up quickly. The tax code requires that you keep a log of the mileage for audit purposes.
Child Tax Credit – The tax code provides a $1,000 tax credit (a credit is actually reduction of your tax liability) for children up to age 17. Many people believe this credit is available until age 18, but it does in fact stop at 17.
Tax Benefits for Education – There are several options available to families to figure out how to cover the cost of post secondary education. These options are discussed in detail in IRA publication 970, Tax Benefits for Education.
Some of the options are credits – American Opportunity Credit and Lifetime Learning Credit – while others are deductions, like the Tuition and Fees Deduction. Many of the tax preparation software packages can analyze your situation to figure out which option will be more beneficial for you.
Finally, the state of Pennsylvania offers a property tax/rent rebate for senior citizens that allow for a rebate of up to $650. This rebate is adjusted based on their income. High income seniors (greater than $35,000) are generally ineligible for the rebate.
Good luck with your tax planning.
Registered Representative, Securities offered through Cambridge Investment Research, Inc., A Broker/Dealer, Member FINRA/SIPC and Investment Advisor Representative, Cambridge Investment Research Advisors, Inc. a Registered Investment Advisor. Family Wealth Services, LLC and Cambridge are not affiliated.
Jim Heisler, CFP®, CDFA™, CASL™ Family Wealth Services, LLC is located at 8275 Frankford Ave. (215-332-4968)
The views expressed are not necessarily those of Cambridge and should not be construed as an offer to buy or sell any security. These situations are hypothetical in nature and do not represent a specific client.