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Tax-Season Tricks That Will Save You Cash

Tax-Season Tricks That Will Save You Cash: © Tetra Images / Alamy Stock Photo

© Tetra Images / Alamy Stock Photo

There’s a reason “doing taxes” is synonymous with drudgery. It’s a boring and tedious chore. So why not just rip through that 1040EZ form and call it a day? Because you may be losing out on hundreds or even thousands of dollars.

Yes, that’s true even if you’re single, childless, renting your place, and working for someone else, says Suba Iyer, a personal finance expert at GetRichSlowly.

Here, Iyer offers four tips that could keep a chunk of cash in your pocket between now and April 18—the date by which you have to file your 2015 taxes. If you answer “Yes” to any of these questions, keep reading.


YOU MOVED FOR A JOB
If you just got out of college, chances are good you relocated for a job. As long as that relocation was 50 miles or farther from where you used to live, you can deduct your moving expenses. That includes the truck you rented or moving company you hired, as well as airfare or hotel expenses during your relocation, according to the IRS. The best part: This is an “above the line” deduction, meaning it gets applied to your pre-tax income, Iyer says.

YOU’RE STILL PAYING STUDENT LOANS
If you’re paying off student loans, you already know you can deduct the loan interest from your taxes. But what if your parents are paying your loan? As long as they’re not claiming you as a dependent on their taxes—and if you’re living on your own and earning an income, they shouldn’t be—then you can deduct the interest they paid on your loan, Iyer says. That could lower your taxable income by $2,500, the IRS says.

YOU DIDN’T MAX OUT YOUR RETIREMENT SAVINGS
How much did you make last year? If you’re single, the tax rate you’ll owe jumps from 15% to 25% once your income rises above $37,450. As long as you stay at or below that number, you pay the lower tax rate. If you’re close, throwing some extra cash into your retirement account could save you hundreds—or potentially thousands if you can also claim some of the other deductions on this list. (You’re allowed to stash up to $5,500 of your income in a retirement account tax-free.)

YOU LIVE IN CALIFORNIA OR NEW YORK
If you choose to itemize your deductions—as opposed to taking the standard $6,300 personal deduction—you’re allowed to count the state and local taxes you paid. Depending on where you live, that could make itemizing worth your while. California and New York have some of the highest state and local taxes in the nation. Ditto Illinois, Connecticut, Iowa, and Nebraska. Especially if you live in a city within one of those states, take the time to figure out how itemizing stacks up against taking the personal deduction, Iyer says.

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