Due to tax preparation software programs, it’s much easier to fill out a federal income tax return now than it was years ago, when you struggled through the process with a No. 2 pencil. But you still have some work cut out for you.
Strategy: Identify the critical tax elections available on your 2013 return. Do the necessary research and make the best choices for your situation.
Here are six ways you might be able to turn a potential tax liability into a tax refund.
1. Be tax-smart about higher education. If you qualify, you can claim either a tuition deduction or one of two tax credits for higher education expenses. The tuition deduction, which is claimed “above the line,” and thus reduces adjusted gross income (AGI), is either $2,000 or $4,000. The maximum American Opportunity Tax Credit (limited to the first four years of undergraduate study) is $2,500 or you might be able to claim a Lifetime Learning credit of up to $2...(register to read more)