(NEXSTAR) – Tax season is upon us again, with less than 80 days until tax returns are due. If you haven’t filed your taxes yet, that means you still have time to take advantage of some commonly overlooked credits and deductions.
As the IRS explains, deductions will reduce the amount of your income before you determine the taxes you owe, and credits can cut the amount of taxes you owe or increase your refund.
While deductions and credits can be helpful, they don’t always have a large impact on your refund (which is expected to be smaller this year).
“There’s no silver bullet,” Mark Steber, chief tax information officer for Jackson Hewitt Tax Services, tells Nexstar. Deductions and credits may result in a couple extra hundred dollars in your pocket, but not thousands.
Deductions
Self-employment
If you’re self-employed, there are a handful of deductions you can take advantage of, Steber says. For example, if you drive for a rideshare company, you can deduct not only the mileage put on your car but expenses for registering it, servicing, oil changes, gas, and tire maintenance.
If you work from home, you may also be able to deduct certain expenses, according to the IRS.
Medical and dental expenses
You can deduct medical or dental expenses you paid for yourself, your spouse, and your dependents if the amount of your total medical expenses exceeds 7.5% of your adjusted gross income, the IRS reports.
Teachers’ expenses
If you’re a teacher, you can deduct up to $250 on any unreimbursed expenses for classroom materials like books, supplies, computers, or other equipment used in your classroom.
Education
There are roughly a dozen tax breaks related to education, according to Steber. One of the most common is a deduction for the amount of interest you’ve paid on your student loans. According to the IRS, you can deduct up to $2,500.
Credits
Earned Income Tax Credit
According to IRS data, one in five taxpayers overlook this credit every year, Steber says. EITC is aimed at low- to moderate-income workers that meet multiple qualifications.
Education
While there are roughly a dozen tax breaks related to education (including those mentioned above), Steber highlights two: the American Opportunity Credit and the Lifetime Learning Credit. You can determine if you qualify for either on the IRS’s website.
Adoption
Qualified adoption expenses may make you eligible for a tax credit and an exclusion from income for employer-provided adoption assistance. According to the IRS, expenses include reasonable and necessary adoption fees; court costs and attorney fees; travel expenses; and other expenses directly related to adopting an eligible child. More details can be found here.
Electric vehicle owners
If you purchased a qualifying electric vehicle in 2022 or 2023, the new version of the EV tax credit maxes out at $7,500. Vehicles bought before 2022 can still be claimed under the old credit if you file an amended tax return for the year of purchase.
Don’t qualify for any of these tax breaks? All hope isn’t lost. Steber recommends checking credits and deductions from your state, calling them “a cornucopia of opportunity.” Your state may offer enhanced earned income credit, or other localized tax breaks that could benefit you.
“The tax code is big, it’s complicated,” Steber says. “There’s some downside to that, it makes taxes hard. The upside is there’s a variety of tax benefits, none of which are a magic bullet to add $5,000 to your tax return, but there’s a lot of $500, smaller bullets in there that can add up both at one time or over time to a significant tax benefit and a significant reduction in your overall tax lifetime liability.”
The tax filing deadline falls on April 18 this year for two reasons: April 15 is on a Saturday, and the District of Columbia’s Emancipation Day holiday falls on April 17, the IRS announced last week.
By Addy Bink with contributions by Jeremy Tanner – 02/04/23 11:00 AM ET