NEW YORK – As you prepare your income tax returns this season, are you missing out on deductions and credits that could result in big savings? Mark Steber, vice president of tax resources at Jackson Hewitt, says millions of Americans do.
"We see more and more overlooked credits and deductions every year," says Steber, so taxpayers need to pay attention. And if you've gone through major life changes in the last year (like getting married, buying a house, moving or getting a new job), the chance that you are eligible for even more deductions jumps significantly.
But even if you haven't had a major life event, there are still some deductions and credits that you might miss. Here are Steber's picks for the most overlooked:
The telephone excise tax refund: "This will be the most overlooked benefit this year," says Steber. Depending on how many exemptions you claim, you can get anywhere from $30 to $60 from the IRS, thanks to the repeal of a tax on long-distance phone service.
Energy efficiency tax credits. "These credits are new, and they only have a couple of years lifespan," says Steber, so they're easy to miss. But they are "applicable to a wide variety of home conservation efforts." The credits are applicable for many types of home improvements, including adding insulation and replacing windows. The changes must be made between Jan. 1, 2006, and Dec. 31, 2007. Homeowners can get a credit of up to $500 for both years combined.
Extended deductions for sales tax, higher education tuition and fees, and out-of-pocket educator expenses. Congress renewed several tax deductions at the last minute this year in late December, long after the IRS had already printed its tax forms. "You have to look at the supplementary forms" to find these deductions, says Steber.