If you’re trying to rush your tax return in to the IRS, be sure you don’t forget to take an inventory of these last-minute tax breaks.
This season marks the first time taxpayers will submit their returns under the new Tax Cuts and Jobs Act. The law overhauled the tax system, doubling standard deductions, eliminating personal exemptions and limiting itemized deductions.
In turn, some of those deductions – unreimbursed employee costs and tax prep costs, for instance – are no longer available.
But here are a few other breaks that you just might be able to claim.
If you bought an electric car in 2018, you might be able to claim a tax credit of up to $7,500.
Be aware that the credit starts to phase out once a manufacturer has sold 200,000 qualifying vehicles, according to Erica D. York, an analyst with the Center for Federal Tax Policy at the Tax Foundation.
In order to qualify, you’ll need to fill out Form 8936.
Here’s a good reason why you shouldn’t toss out all those statements you get from your lenders: You just might be eligible for a deduction of up to $2,500 in student loan interest.
A bonus: This is an “above-the-line” deduction, so you don’t have to itemize on your return to get it.
As long as you have paid at least $600 in student loan interest, you will receive Form 1098-E from your lender or the company servicing your debt. You can use this to claim the deduction.
The amount of the credit begins to fall once your modified adjusted gross income reaches $65,000 if single ($135,000 for joint returns).
Once your MAGI hits $80,000 if you’re single or $165,000 if married and filing jointly, you can no longer claim it.
Here’s a last-minute tax break you can take just before you send in your return: It’s the saver’s credit – a tax credit for making contributions to your IRA or workplace retirement plan.
Depending on your adjusted gross income, you can be eligible for a credit of up to 50 percent of your contribution. The credit begins to phase out at $19,000 for single filers or $38,000 for married-filing-jointly.
If your AGI exceeds $31,500 if you’re single or $63,000 if you’re married, you can’t take the break.
In all, the maximum credit is $2,000 if single or $4,000 if married and filing jointly.
You also have until April 15 to make a contribution to your IRA and have it count for 2018, said Lisa Greene-Lewis, CPA at TurboTax.
“People know about the child and dependent care credit, but it gets overlooked,” said Susan Allen, CPA and senior manager for tax practice and ethics at the American Institute of CPAs.
The average cost of care for one child is about $9,000, according to Child Care Aware of America. Care for two kids can approach the cost of college tuition.
Working families should be aware of the child and dependent care tax credit, which maxes out at $1,050 for one child under age 13 or $2,100 for two or more kids under 13. How much you get will depend on your adjusted gross income.
You’ll need the taxpayer identification number of the person or center providing care for your kids.
You might have a dependent care flexible spending account at work, which you can use to save up to $5,000 per year per household on a pretax basis. If this is the case, be aware that you can’t tap both the FSA and the dependent care credit for the same expenses.
Maybe your child, the new college graduate, is crashing on your couch.
Though the $2,000 child tax credit is out of reach – and you can no longer claim a $4,050 dependent exemption for him – you may be eligible for a $500 dependent credit.
It isn’t just your grown kids who qualify, either.
“You’re still able to get this credit if you’ve been supporting a friend, but you must meet the support requirements,” said Greene-Lewis.
If you’re claiming this credit for someone who isn’t related to you, then they must be living with you the whole year and must receive more than half of their support from you.
They also must not have gross income over $4,150 for 2018.