Rushing to file your taxes is a problem on multiple fronts. You might make a mistake, misplace a figure, or even forget to sign your tax return.
It’s even more likely, however, that you’ll miss a tax credit or a deduction that can lower your taxable income and save you money.
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“There are many tax deductions and credits that are overlooked,” says Lisa Greene-Lewis, a CPA and tax expert for TurboTax.
Take the earned income tax credit, which is a credit for low- to moderate- income workers. “The IRS reports one in five taxpayers miss that tax credit,” Greene-Lewis tells TheStreet host Gregg Greenberg in this special video series. “A common reason to do so is because people’s income levels change and they don't realize they're eligible for the earned income tax credit.”
Another one in five taxpayers miss is the tax saver's credit.
“That’s a credit a taxpayer can earn just for investing in your retirement,’ Greene-Lewis notes. “You can use the credit in your IRA or your 401(k), and it can be up to $1,000 if you're single and $2,000 if you’re married and filing jointly.”
Student loans also offer tax deductions and credits.
“For this tax year, you're able to deduct your student loan interest up to $2,500,” Greene-Lewis adds. “Even if you took just one college course to improve your skills or get that promotion, you may be eligible for the lifetime learning credit that’s up to $2,000.”
If you miss filing for a tax credit, you have more time than you think to correct the issue.
“According to IRS rules, you can go three years back and claim that deduction or credit,” she says. “For example, coming up on this April 15, if you didn't file your 2016 tax return or you missed a deduction or credit, you have until April of this year to file that return and get that tax credit.”
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