MONTGOMERY, AL (WSFA) - You're supposed to have received your W-2 forms by now, which means it's tax time again. But before you sit down and prepare your return, WSFA 12 News has some tips that could boost your refund.
There are two things that can save you money on your taxes -- deductions and credits. The secret is knowing which ones you qualify for.
Thanks to the recent economic stimulus package, more Americans are eligible for more tax credits this year. Accountant Jerry Grant of the Montgomery firm Bern, Butler, Capilouto and Massey gave us some examples.
Grant told us about the newly expanded American Opportunity Credit, which reimburses you for educational costs.
"A lot of individuals who in the past were not eligible to utilize the credit will now be able to and they could see a substantial savings," Grant said.
Some parents may also qualify for a child care credit, reimbursing them for day care expenses.
And if you bought a house last year, you could qualify for an expanded home buyer's credit.
"That's going to allow somebody who's purchasing a principal residence, either as a first time home buyer or as someone who is purchasing a home after living in a previous residence for a longer period of time, to take a credit on their income tax return as a percentage of the purchase price of the home," Grant explained.
Speaking of your home, new tax credits are now available for those homeowners who have made improvements in order to increase their energy efficiency.
Another big change this year is the expanded Earned Income Tax Credit. It's not just for families anymore. Even single workers who make under a certain income can qualify.
Finally, do you remember when your paycheck got a little fatter last year? Your employer reduced your tax withholding as a result of the economic stimulus package. That made yet another new tax credit necessary. It's called the Making Work Pay Credit.
We all know you can deduct donations to charity. You can also deduct from your federal return what you paid in state taxes.
And here's a big change to the tax code -- even if you don't have enough deductions to itemize this year, you can still deduct your property taxes over and above the standard deduction.
These are just some ways to reduce what you owe Uncle Sam. For other tips, check out the WSFA 12 News Tax Guide.
You can also find more information on the Internal Revenue Service's web site.
Preparing Your Return
If you don't want to hire a certified public accountant to help you with your return, you may want to invest in a software program that can talk you through it.
There are several downloadable programs on line. Some of them are even free. You'll find more information here.