Key Tax Benefits for a Bigger Tax Refund
Updated to tax year 2024.
Do you dread the income tax season every year? We get it. But there are some things that can make the tax filing process a little easier to swallow — tax refunds, credits, and deductions.
Tax savings opportunities
From advantages for solo tax filers to charitable donations, the tax code offers an array of ways to lower your final tax bill and potentially boost your tax refund. When you’re ready to file your federal tax return, watch for these key tax benefits to receive a bigger tax refund:
Family tax savings
- The Child Tax Credit is worth up to $2,000 per eligible child in 2024 and is refundable for taxpayers with an earned income of up to $200,000 (single filers) or $400,000 (joint filers).
- Parents who work or attend school and pay for childcare may qualify for the Child and Dependent Care Credit. The maximum expenses that can be used to calculate this credit are $3,000 for each qualifying dependent, or $6,000 if there are two or more dependents who qualify under the age 13. The maximum credit in 2024 is $1.050 for a child and $2.100 for two or three children. The amount of the refundable credit is determined by filing status, number of qualifying children and income level. Families with three or more qualifying children could qualify for up to $7,830 in 2024.
- College and education tax savingsPaying off student loans? You can deduct up $2,500 of interest paid on student loans in 2024 depending on your income. You can also claim the Lifetime Learning Credit (LLC)
for tuition and related expenses at eligible institutions after the first four years of post-secondary education expenses.
- Contributing to a Coverdell Education Savings Account? You can contribute a maximum of $2,000 per student in annual contributions that will grow tax-free until withdrawn.
- Homeowners tax savingsHomeowners can use the mortgage interest deduction to deduct up to $750,000 on the mortgage interest paid as a single filer or married couple filing jointly, or $375,000 on the mortgage interest paid if you’re married but filing separately.The
- property tax deduction
allows a married couple filing jointly to deduct up to $10,000, or $5,000 if single or married filing separately.
- The home office deduction is for people who run a business. This deduction is an amount based on the percentage of their home used for operating the business.Employee tax savings
- Grade K-12 educators can deduct $300 in out-of-pocket expenses for classroom supplies.You may be able to exempt employer-provided mass transit and parking benefits from your gross income.If you itemize and have paid for work-related education, there’s a deduction for your costs paid minus any employer-reimbursed amount.
- The bottom lineReady to see what tax breaks you qualify for this year? You can get a deduction for your costs paid for work-related education minus any employer-reimbursed amount if you itemize. Receipts and a copy last year’s tax return are also helpful. You can use a checklist to determine what information you will need. You can then e-file your tax return with TaxAct(r), for a more simplified experience. We also have a comprehensive guide to receiving your refund if you’re still waiting for it. It includes detailed information on each step. This article is for informational purposes only and not legal or financial advice.
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