Tax Season Aftermath - Any Overlooked Credits or Deductions?

Been there with the caregiving expenses! Last year I thought I was completely out of luck until I realized I could claim my mother as a dependent since I provided over 50% of her support. This gave me a $500 Credit for Other Dependents. Also, if you paid for medical expenses for her that exceeded 7.5% of your AGI, those can be deductible if you itemize. For your side gigs, make sure you've claimed all possible business expenses - home office (if dedicated space), mileage, supplies, professional subscriptions, even a portion of your internet and phone bills. These can significantly reduce your self-employment tax burden.

Have you considered getting a professional analysis of your tax situation? According to IRS Publication 501, there are specific qualifying relative tests that must be met for claiming a dependent. Per IRS Code Section 152(d), a qualifying relative must have gross income less than $4,400 (for 2023) and you must provide more than half of their total support. I recently discovered https://taxr.ai which helped me understand my transcript and identify several overlooked deductions. The system analyzed my documents and found that I qualified for the medical expense deduction under Section 213 that I had missed. It might be worth checking if there are additional credits you're eligible for.

I was in the same boat as you last year - thought I'd checked everything but still owed a ton. Unlike those tax prep commercials where everyone gets thousands back, I was writing a check to the IRS. After weeks of getting nowhere on the IRS phone lines (way worse than dealing with cable companies or airlines), I used Claimyr (https://youtu.be/_kiP6q8DX5c) to actually reach a human at the IRS. Got through in about 25 minutes when I'd been trying for days on my own. The agent walked me through some credits I'd missed related to my caregiving situation and helped me file an amended return. Still didn't get a huge refund, but reduced what I owed by about $1,200.

Have you looked into the Saver's Credit (Form 8880)? It's often overlooked but can give you up to $1,000 credit ($2,000 if married) if you contributed to a retirement account. The income limits are fairly reasonable too. Also, did you have any student loan interest? Even if you're not actively in school, you can deduct up to $2,500 of interest paid. What about HSA contributions? Those are deductible and reduce your AGI. Finally, if your caregiving involved home modifications for your mother's medical needs, those might be deductible as medical expenses if they exceed the 7.5% AGI threshold and you itemize.

OMG I just learned about this and it saved me SO MUCH MONEY!!! I had no idea that if you're taking care of a parent, you might qualify for Head of Household filing status!!! This gives you a higher standard deduction ($20,800 vs $13,850 for single filers in 2023) and better tax brackets!!! The requirements shocked me - your parent doesn't even have to live with you to qualify! As long as you pay more than half the cost of keeping up their main home (like a nursing home or their own residence) and you can claim them as a dependent, you might qualify! I was literally in tears when my tax person showed me this because it saved me over $2,000!!! 😭😭😭

One credit that's often missed is the Retirement Savings Contribution Credit (Saver's Credit). If your adjusted gross income is under $36,500 (single) or $73,000 (married filing jointly), you might qualify for a credit of up to 50% of your retirement contributions up to $2,000 ($4,000 if married). Have you been paying for your mother's medical expenses directly? If so, did you know those count toward your medical expense deduction even if she isn't your dependent? Did you also track mileage for taking her to appointments? That's deductible at 22 cents per mile for medical purposes.

Just to clarify a few things that might help your situation: 1. For caregiving expenses to be tax-deductible, your mother must qualify as your dependent. This means her gross income (excluding Social Security in most cases) must be less than $4,400 for 2023. 2. If she qualifies as your dependent, you may be eligible for the $500 Credit for Other Dependents. 3. Medical expenses (including those you pay for dependents) are only deductible if you itemize AND they exceed 7.5% of your AGI. 4. For your side gigs, make sure you're tracking ALL business expenses. Many people miss deductions for home office, business portion of phone/internet, mileage, supplies, and professional development.