Maximize your tax refund

According to the Internal Revenue Service, more than 101 million income tax refunds were issued in 2013, averaging $2,651 each. The average was a couple hundred dollars more for taxpayers who elected to have their refund directly deposited into a bank account.

Averages in 2014 will likely be similar because of tax legislation passed in the first couple days of 2013, according to TaxACT spokesperson Jessi Dolmage.

“The now-permanent and extended tax breaks will benefit taxpayers of all situations, including families, college students and homeowners,” said Dolmage.

The credits and deductions available on federal returns due April 15, 2014 include:

  • Child and Dependent Care Credit - The maximum amount of child and dependent care expenses eligible for the credit is now $3,000 if you have one child or $6,000 if you have two or more children. These increased amounts are permanent.
  • Child Tax Credit - The credit has been made permanent at $1,000 per child under the age of 17 at the end of 2013. This credit may be claimed in addition to the Child and Dependent Care Credit.
  • Tuition and fees deduction - If you, your spouse or your dependent are enrolled in a postsecondary institution, you may be able to deduct tuition expenses as an adjustment to income, even if you don't itemize deductions. You generally take this deduction if you don't qualify for an education credit or other tax break for the same expenses.
  • American Opportunity Credit - The maximum amount of this credit for the first four years of post-secondary education costs in a degree or certificate program is $2,500 per student. Costs may include tuition, fees and course materials (books). If you don't owe any tax, you may also be eligible to receive up to 40 percent of the credit ($1,000) as a refund.
  • Educator expenses deduction - Elementary and secondary educators can deduct up to $250 in related job expenses as an adjustment to income, even if not itemizing deductions. Unlike most employee expenses, educator expenses are not reduced by 2 percent of your adjusted gross income.
  • Deduction for mortgage insurance premiums - If you pay mortgage insurance premiums, also known as private mortgage insurance (PMI), you may be able to deduct premiums as mortgage interest.
  • Alternative Minimum Tax - The AMT was created to ensure wealthy taxpayers receiving large tax benefits pay some tax. It will now be adjusted for inflation each year so fewer taxpayers are subject to the tax. The exemption amount rises in 2013 to $51,900 ($80,800, for married couples filing jointly). For married individuals filing separately, the exemption is $40,400.
  • Adoption credit - You may qualify for a credit equal to up to $12,970 of your adoption expenses including fees, court costs, attorney fees, traveling expense and other expenses directly related to and for the principal purpose of the legal adoption of an eligible child. If your employer provides adoption benefits, you may also be able to exclude up to the same amount from your income. Both a credit and exclusion may be claimed for the same adoption, but not for the same expense.
  • State and local sales tax deduction - For 2013, you can still deduct state and local sales taxes. You can take this deduction or a deduction for state income tax - but not both.

As with most tax benefits, you must meet certain criteria in order to claim them on your tax return, and even if you are eligible, you may not qualify for the entire amount.

Online and mobile consumer tax preparation programs make it easy to do your own taxes and confidently claim all your deductions and credits. As you answer simple questions, the program completes your tax forms and checks for errors and potential opportunities. One of the top solutions, TaxACT, even helps you plan for next year with guidance for the implications of the Affordable Care Act on your taxes.

Learn more about these deductions and credits at www.irs.gov, and file your federal taxes free at www.taxact.com.

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Upcoming Tax Dates

April 10 Employees who work for tips
If you received $20 or more in tips during March, report them to your employer. You can use Form 4070.

April 10 Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the first 15 days of March.

April 14 Regular method taxes
Deposit the tax for the last 16 days of March.

April 15 Individuals
File a 2014 income tax return (Form 1040, 1040A, or 1040EZ) and pay any tax due. If you want an automatic 6 month extension of time to file the return, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. For more information, see Form 4868. Then, file Form 1040, 1040A, or 1040EZ by October 15.

April 15 Individuals
If you are not paying your 2015 income tax through withholding (or will not pay in enough tax during the year that way), pay the first installment of your 2015 estimated tax. Use Form 1040ES.

April 15 Household Employers
If you paid cash wages of $1,800 or more in 2014 to a household employee, you must file Schedule H - Details

April 15 Partnerships
File a 2014 calendar year return (Form 1065) - Details

April 15 Partnerships
Electing large partnerships: File a 2014 calendar year return (Form 1065-B) - Details

April 15 Corporations
Deposit the first installment of estimated income tax for 2015 - Details

April 15 Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in March.

April 15 Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in March.

April 15 Household employers
If you paid cash wages of $1,900 or more in 2014 to a household employee, you must file Schedule H (Form 1040). If you are required to file a federal income tax return (Form 1040), file Schedule H (Form 1040) with the return and report any household employment taxes. Report any federal unemployment (FUTA) tax on Schedule H (Form 1040) if you paid total cash wages of $1,000 or more in any calendar quarter of 2013 or 2014 to household employees. Also, report any income tax you withheld for your household employees.

April 27 Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the last 16 days of March.

April 29 Regular method taxes
Deposit the tax for the first 15 days of April.

April 30 Social security, Medicare, and withheld income tax
File Form 941 for the first quarter of 2015. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until May 11 to file the return.

April 30 Federal unemployment tax.
Deposit the tax owed through March if more than $500.

April 30 Form 720 taxes
File Form 720 for the first quarter of 2015.

April 30 Wagering tax
File Form 730 and pay the tax on wagers accepted during March.

April 30 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in March.

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