Learning Center
Did You Pay Too Much Tax in Prior Years?
Article Highlights
- Overlooking Tax Benefits
- Last Three Years Can Be Amended
- Sampling of Commonly Overlooked Benefits
- Professional Review
If something was overlooked, there is still time to get a refund for 2015, 2016 or 2017 (or even 2014, for some state returns). So if you know you missed something, or even if you just want a professional to look over your past returns to see if something was overlooked, give this office a call.
Here is a list of some (but not all) frequently overlooked tax benefits that may apply to you. Some of these were extended to 2017 in a special bill passed by Congress in the middle of February 2018, so if you filed your 2017 return before that date or used a preparer who does not keep up with changes, there’s a chance one or more items may apply to you. Please note that the items listed below apply to years 2015 through 2017.
- Above-the-line Tuition Deduction – Allows a deduction of up to $4,000 for higher education tuition without itemizing deductions.
- American Opportunity Credit – Provides a tax credit of up to $2,500 for the first four years of your or your qualified child’s higher education tuition and qualified expenses, even if paid by someone other than you.
- Lifetime Learning Credit – Offers a credit of up to $2,000 for tuition and qualified higher education expenses for family members.
- Student Loan Interest – A deduction of up to $2,500 for student loan interest paid, which is deductible without itemizing deductions.
- Mortgage Insurance Premiums – Premiums on contracts issued after 2006 can generally be deducted as home mortgage interest when itemizing deductions.
- Home Energy Efficient Improvement – A tax credit of up to $500 for making certain home energy improvements.
- Electric Vehicle Credit – A credit of up to $7,500 for purchase of plug-in electric vehicles, if the manufacturer has not exceeded the 250,000-unit sales limit for qualifying for the credit.
- Excess FICA – If an individual had more than one employer during the year and the FICA withholding for the year exceeded the overall FICA withholding cap, the excess is refundable on the 1040.
- Consumer Interest – Generally, consumer interest is not deductible. But if a loan is used to purchase a vehicle or other property used both for business and personally, the portion of the interest allocable to business is deductible as business interest (does not apply to employee business expenses).
- Surviving Spouse Filing Status – For the two years after the death of a spouse, a surviving spouse with a dependent child can continue to benefit from the married filing joint tax rates.
- Head of Household Filing Status – A married individual, separated and living apart from their spouse for the last 6 months of the year, can use the more beneficial head of household filing status, which is normally only available for unmarried individuals.
- Saver’s Credit – For lower-income taxpayers making retirement plan or IRA contributions, the saver’s credit provides a credit of 10, 20 or even 50 percent of the taxpayer’s contribution to a retirement plan. The overall cap on this credit is $1,000.
- Medicare Premiums – Frequently overlooked either as a medical itemized deduction or for the self-employed medical insurance deduction are the Medicare premiums withheld from Social Security benefits.
- Penalty Abatement – Professional tax preparers use a number of tax provisions to have various tax penalties abated, including the late filing penalty, ACA penalty for not having health insurance, penalty for not withdrawing the required minimum amount from a pension plan or a traditional IRA, early retirement plan or IRA withdrawal penalty, negligence penalty and more.
- Overlooked Points – Points paid for the purchase of a home are generally deductible as part of the itemized deduction for mortgage interest.
- State Tax Refunds – The amount shown on Form 1099-G, the state tax refund a taxpayer received from their prior year’s return, may not be federally taxable or may be only partly taxable. Examples include when a taxpayer claimed the standard deduction on their prior year’s federal return or if their prior year’s federal tax included the alternative minimum tax.
NEVER MISS A STORY.
Sign up for our newsletters and get our articles delivered right to your inbox.
Rose Tax & Financial
Cedar Crest, New Mexico 87008
Sat: 10:00am to 2:00pm
Check the background of your financial professional on FINRA's BrokerCheck
Avantax affiliated Financial Professionals may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state. Securities offered through Avantax Investment Services℠, Member FINRA, SIPC, Investment Advisory services offered through Avantax Advisory ServicesSM, Insurance services offered through an Avantax affiliated insurance agency. 3200 Olympus Blvd., Suite 100, Dallas, TX 75019. 972-870-6000.
The Avantax family of companies exclusively provide financial products and services through its financial representatives. Although Avantax Wealth Management® does not provide or supervise tax or accounting services, Avantax representatives may offer these services through their independent outside business. Content, links, and some material within this website may have been created by a third party for use by an Avantax affiliated representative. This content is for educational and informational purposes only and does not represent the views and opinions of Avantax Wealth Management® or its subsidiaries. Avantax Wealth Management® is not responsible for and does not control, adopt, or endorse any content contained on any third party website.
This information is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences.
For Important Information and Form CRS please visit https://www.avantax.com/disclosures.