It’s tax time, and we are continuing our series on taxes this morning with a look at tax breaks: they’re not just for lowering how much you owe, but could result in a bigger refund.
Jackson Hewitt Chief Tax Information Officer Mark Steber says everyone needs to look at their potential tax breaks and think of it as a financial and spending decision potentially.
“Don’t shortcut your single largest financial transaction of the year,” he advises.
Steber estimates that 100 million Americans could qualify for a tax refund, and the IRS could pay out hundreds of millions of dollars to those Americans, many of whom reside in Washington state.
Capitalizing on your tax breaks can help with a variety of expenses too. From medical costs, to student loans and home improvement projects, breaks are out there for the taking.
The Internal Revenue Service says that one of the biggest changes for this year’s tax cycle is that the standard deduction has been increased due to inflation. Everyone could catch a break and could owe less, or see an even bigger refund. Congress is also debating changes to the child tax credit, which could mean a bigger deduction per child, that would be a huge tax break for parents.
Steber says there are a variety of breaks people need to be aware of for this tax cycle in particular.
“New this year, for 2023 put in right at the end of the year are some new green credits,” he said. “If you purchased an alternative fuel vehicle you might have a credit. if you made some improvements to your home to make it more energy efficient, you might qualify for credits. "
There is also the “American Opportunity” tax credit that lets you claim all of the first $2,000 you spent on tuition, books, equipment and school fees.
Adoption could also yield a break, as the adoption credit helps taxpayers cover some qualified adoption costs per child.
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