How can you prepare?
The best way you can prepare for taxes is to start collecting documents now! Make sure you collect supporting documents and receipts for all your deductions – and make sure you take advantage of ALL deductions, so you don’t pay any more taxes than required. You also want to be sure you receive all the credits available to you. Here are a few for you to consider:
Credits: (These reduce the amount of tax you owe or increase your refund.)
Family and Dependent Credits – if you have a parent of family member living with you, you could receive
a credit – this is in addition to children in the household.
Childcare Credit – based on amounts you paid to someone to care for your child.
Earned Income Tax Credit – based on income and number of children – some rules apply.
Education Credits – Lifetime Learning and American Opportunities credits – be sure to collect all
expenses paid for education – things like books, computers,and tuition – required for classes.
Adoption Credit – if you adopted a child in 2023, you could be due a large credit. Credits are based on
several factors of the adoption, so let’s discuss!
Saver’s credit – this is for those who contribute to a retirement plan and fall within a certain income range. The lower your income, the higher the credit rate.
Vehicle Energy Credits – these are for new and used ‘clean’ vehicles. By ‘clean,’ they mean electric or
fuel cell. You will need purchase information and certificates from the dealership, but the credit is worth the hassle.
Home Energy Credits – these are for energy efficient improvements – windows, doors, insulation, water
heaters, air conditioning, home energy audits – there are a lot of details but again, worth the trouble if you qualify.
Deductions: (These reduce the amount of income that you pay taxes on.)
Business Use of Home/Car – These are deductible for state purposes but not federal. If you work from
home, this could lower your Arkansas tax bill.
Taxes paid – Personal Property, Real Estate, Sales Tax
Contributions
Home Mortgage Interest
Moving Expenses – if for a job and again, only on state unless military.
Student Loan Interest
Teacher Expenses – up to $300! Any amount over is a charitable contribution if you work at a public
school so be sure to gather those receipts!
Medical and Dental Expenses
Health Savings Account Contributions
This is not an all-inclusive list so be sure you discuss everything in detail with your tax preparer. A good conversation may take a little more time, but it could lower your tax bill or increase your refund.
Happy New Year!
Anita K Mize, CPA
