I recently talked about five ways to get a bigger tax refund next year so it lasts into summer. Well, I told you I would have more to help you keep more money in your pocket.
Here are five more tips on how to do just that.
1. Go solar. Because solar energy is so efficient, the government is offering a 30% tax credit for solar energy systems and geothermal heat pumps, as well as small wind turbines with no limit on the credit you can claim. This credit is available through 2016.
2. Get educated. More and more adults are going back to school to learn a new career, update skills in their existing career, or study a subject they are interested in just for the heck of it. Whatever your motivation for taking classes, if your income is moderate you are eligible for the Lifetime Learning credit as well as college credits. You can claim a tax credit of 20% of all your tuition expenses, up to $2,000 in tax credits. You don’t need to be on track for a degree – the cost of any class that you take at the college level is eligible for the credit.
3. Deduct your job-hunting expenses. Wouldn’t it be nice to find a better paying job this year? You can deduct the cost of job-hunting travel, meals, telephone calls, resume preparation, career counseling and employment agencies, to the extent that they exceed two percent of your income, regardless of whether you actually change jobs. However, you can’t deduct the cost of finding your first job, or changing careers. And if you are working two jobs, the cost of commuting between them can be claimed as a miscellaneous deduction.
4. Invest for your future. If you put money into an IRA, you’ll boost both your tax refund and your wealth. Although you have until April 15 of the following year to contribute to your IRA, contribute now and your money will have that much longer to grow. If your employer matches contributions you may get a better deal contributing to your employer’s 401(k) plan, and if you are many years away from retirement, a non-deductible Roth IRA may save more taxes in the long run, since the earnings are non-taxable when you draw them out in retirement.
5. Get married. Timing your marriage can make a difference: If both you and your beloved are employed, you might pay more taxes as a married couple, so it might be better to marry the following January than December. But if one of you earns most of the money, you might pay less, so a December wedding might be wise. You can use TurboTax to project your tax situation to help you decide.