Everyone wants to save the most that they possibly can come tax season, but it can be difficult to know exactly how to maximize your savings while dealing with the often-complicated tax codes and IRS regulations. In order to get all of the tax savings that you can, it is important that you are aware of all of the tax credits and deductions that you are entitled to. Luckily, tax services in Des Moines, IA can help!
Understanding tax credits
Tax credits are the most effective way for you to save on your taxes, as you get everything that you claim as a credit back in your pocket:
- Child tax credit: The child tax credit gives up to $1,000 per child under the age of 17 in a household for individuals who are married and filing jointly. In the case of divorced couples, only one person can claim the credit.
- Dependent care credit: Parents who are working are able to claim up to $3,000 to cover the childcare costs of children who are disabled or under the age of 13.
- Savers credit: Couples filing jointly with an income of less than $55,000 or singles with an income of less than $27,500 can claim a credit of up to $2,000 for retirement plan contributions.
- Energy credits: Energy credits are worth up to 30 percent of the cost of implementing renewable power sources for a residence. There are some guidelines about what you need to qualify for this credit, so reach out to a provider of professional tax services in Des Moines, IA if you are unsure about whether you qualify.
- Education credits: The American Opportunity Credit offers $2,500 a year for post-secondary education expenses for four years.
Getting applicable deductions
Deductions can also save you money, as they allow you to reduce your adjusted gross income, which can impact the credits that you qualify for in addition to the tax bracket that you fall into:
- Retirement plan contributions: You can deduct both pre-tax contributions you make to a 401(k) as well as IRA contributions. You can deduct up to $5,500.
- Health savings account: The health savings deduction applies to contributions made to HSAs and can deduct up to $6,500 for joint filers and $3,300 for single individuals. If you need more information about this deduction, you can consult professional tax services in Des Moines, IA for more information.
- Student loan interest: If you pay interest on student loans, you can deduct up to $2,500 from your tax filing. However, if you are filing jointly and make an adjusted gross income of over $120,000, or if you are single and your AGI is over $60,000, these benefits begin to phase out.
- Work-related moving expenses: If your new job caused you to move more than 50 miles away, you can deduct moving-related expenses such as mileage, lodging, moving services and supplies. This deduction can be applied up to a year after the start of your new job.
Professional tax services in Des Moines, IA
At Accounting & Tax Professionals, PLC, we can help you maximize your credits and deductions when it comes time to file your taxes. Our team of professional tax and accounting specialists has years of experience working with a variety of clients to ensure that they understand the tax process and that they are getting the most savings possible.