Congratulations on filing your 2014 tax return!
Now, are you sure you got back the whole refund you were entitled to? Leer en español.
Not getting your full refund isn’t as crazy as you might think. There are several common mistakes that frequently come up. Let’s see if any apply to you.
Wrong Filing Status
Your filing status determines your tax bracket and the amount of your standard deduction. In other words, the filing status that you choose has a huge impact on your tax return. The one that is especially concerning is those individuals who choose to file as “Single” when they actually qualify to file as “Head of Household.” There are extra criteria for using Head of Household, but if you meet those criteria you can reap substantial financial benefits, including a larger standard deduction.
Missing Itemized Deductions
Many taxpayers will claim the standard deduction instead of itemizing. Truth be told, it’s just easier! However, the amount of deductible expenses you incur over the course of a year can really add up. For example, the interest on a typical home mortgage can easily exceed the threshold necessary for itemizing to be worthwhile. Additionally, if you had significant medical expenses, charitable donations or student loan interest, the amount you can deduct keeps increasing. If you have enough deductions, itemizing them may result in a lower taxable income than just taking the standard deduction.
Missing Education Tax Benefits
There are more than 18 million people in college in the U.S., but only two-thirds are claiming one of the higher education tax breaks. Those tax breaks include the American Opportunity Credit and Lifetime Learning Credit. The rules can certainly be complicated and deter some people from filing these credits, but the benefits are undeniable. The American Opportunity Tax Credit is worth up to $2,500 while the Lifetime Learning Credit is worth up to $2,000.
Overlooked Earned Income Tax Credit
The Earned Income Tax Credit (EIC) has some tricky rules around income, marital status and family size, and it can easily be missed when rushing to complete a tax return. In fact, the IRS has said that only 20% of eligible taxpayers claim this credit.
What To Do?
You can amend a tax return for up to three years from the filing date. Many people think they only need to amend a return if they owe the IRS additional money or if you catch an error on your return, but you can also amend your return to get more of a refund returned to you.
H&R Block can help.
We offer a free Second Look Review® for returns that were prepared by someone other than H&R Block. You can make an appointment to have a tax professional go over your previous returns and determine whether you should amend to claim a larger refund. Or, take an online assessment now.
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