Top 5 tax credits & deductions for 2013

Teresa Smith writes: Tax season is never a time that anyone really relished, with many folks leaving it till the very least second before rushing to compete their annual duty. The problem that tends to create is that people will often overlook money that is owed to them, simply because they don’t have the time to fill out their forms properly, or because they cannot afford to hire someone to do the job for the. Sometimes finding the top tax credits for2013 means having someone in the know ask the right questions. What follows are 5 of the top tax credits that you may be eligible for, yet know nothing about:

1. Student Loan Debt – Getting a good education is an absolute must, but college students are often left feeling the pinch once they graduate, with the weight of students loans often holding them down. It is possible to write off as much as $2,500 per year in the interest payments made on those loans.

2. Dependents – Everyone is well aware of the nice child tax deductions that are available when you have children, but that can actually also extend to your parents. You can get an exemption of $3,800 if your parent makes less than that amount annually, and if you and your siblings pay more than half of their bills.

3. Housing – The mortgage tax deduction is a pretty common one and the recent economic issues led more than a few families to look at refinancing their home rather than losing it. If you had your lender forgive a portion of your mortgage debt, the amount that you saved does not have to be listed as income on your tax return, assuming that this was done on your primary residence. You might also be able to deduct any private mortgage insurance that you paid, although you may have to have put down a minimum of 20% on your home in order for that to apply.

4. Charity – If there is one good thing about tax return software, other than the convenience factor, it is that itemizing your charitable donations can get you a bigger deduction. Rather than being given a flat rate for your donation, you can itemize each article and piece of clothing in order to get a “fair value” when adding it to your tax forms. That said, you will need to have receipts and other paperwork handy in order to go that route. If you do regular charity work that involves the use of your car, you may also be entitled to a 14 cent per mile tax deduction.

5. State Sales Tax – This one is actually dependent on where you live, and likely won’t be applicable to folks that live in high-tax states such as California. If, on the other hand, you live in a state such as Florida where there is no income tax, you can choose between deducting state income tax and state sales tax. That can add up to a very nice deduction if you purchased a big ticket item during the year.