PARSIPPANY, N.J., April 4, 2011 /PRNewswire/ -- With the April 18, 2011, tax filing deadline quickly approaching, one of the most common errors made by taxpayers is that they mistakenly don't report items on tax returns that could help them. According to Jackson Hewitt Tax Service®, taxpayers leave money on the table every year by missing out on a variety of relevant tax credits and deductions.
Fortunately, by taking the time to learn about these potential credits and deductions, and knowing what information and materials to have ready in advance of having your tax return prepared, this common mistake is easily avoidable.
"Because of the numerous tax law changes that happen annually, taxpayers should educate themselves on the credits and deductions possibly available to them, as well as some that are no longer relevant because they expired," said Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. "There is a large range of tax benefits, so determining if you're eligible and then properly claiming them can result in a significantly lower tax liability, and may result in an increased refund amount."
According to Steber, there are a number of commonly overlooked credits that filers may not be aware of, including:
- Alternative Motor Vehicle Credit: This is a series of nonrefundable credits for certain qualified new vehicles purchased. The vehicle must be made by a manufacturer (not an individual) and must use certain types of alternative fuel;
- The Child Tax Credit: Taxpayers can claim up to $1,000 for each qualifying dependent child who was under age 17 at the end of 2010;
- The Additional Child Tax Credit: Taxpayers who earned $3,000 or more and did not use all of their Child Tax Credit may qualify for a refundable credit up to $1,000 per child;
- Earned Income Tax Credit: This credit, often called the "EITC," is a refundable credit for low-income workers (with or without children) who have earned income. Depending on income thresholds, taxpayers could be entitled to a refundable credit of up to $3,050 (with one qualifying child), $5,036 (with two qualifying children), or $5,666 (with three or more qualifying children). If taxpayers have no children, they may even qualify for a credit of up to $457; and,
- The American Opportunity Tax Credit: The American Opportunity Tax Credit is a credit of up to $2,500 based on qualified tuition, fees and related higher education expenses such as books and software. This credit is unique because 40 percent of the credit, up to $1,000, is refundable and the balance is nonrefundable.
Steber notes that there are also common deductions that are often overlooked and they fall into the following key categories:
- Medical-related: Expenses for travel to health facilities and doctor's offices, nursing home and services, medical aids and equipment, and hospital fees;
- Job-related: Education expenses to improve job skills; professional journals, magazines and newspapers; union dues; mobile phone charges required for business; and self-employment tax and insurance premiums; and,
- Property-related: Moving expenses; personal property taxes on cars, boats, etc. and casualty and theft losses.
"This late in the tax season you definitely don't want to rush and miss tax benefits that you deserve and are entitled to," said Steber. "Some key ways to make sure you don't leave anything out is to review your year for life changes (marriage, divorce, etc.), use a checklist of overlooked credits or deductions and lastly, get help from a knowledgeable tax professional."
About Jackson Hewitt Tax Service Inc.
Based in Parsippany, N.J., Jackson Hewitt Tax Service Inc. (NYSE: JTX) is an industry leading provider of full service individual federal and state income tax preparation, with franchised and company-owned office locations throughout the United States. Jackson Hewitt Tax Service® also offers an online tax preparation product at www.jacksonhewittonline.com. For more information, or to locate the Jackson Hewitt® office nearest to you, visit www.jacksonhewitt.com or call 1-800-234-1040. Jackson Hewitt can also be found on Facebook and Twitter.
SOURCE Jackson Hewitt Tax Service Inc.