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Did You Pay Too Much Tax in Prior Years?

Article Highlights

  • Overlooking Tax Benefits 
  • Last Three Years Can Be Amended 
  • Sampling of Commonly Overlooked Benefits 
  • Professional Review 
Have you been preparing your own returns? If not, did you have someone prepare it who didn’t take the time to query you about possible tax deductions, credits or filing status options? If you answered either question yes, you could have missed out on a number of tax benefits that could have saved you big bucks in taxes.

If something was overlooked, there is still time to get a refund for 2015, 2016 or 2017 (or even 2014, for some state returns). So if you know you missed something, or even if you just want a professional to look over your past returns to see if something was overlooked, give this office a call.

Here is a list of some (but not all) frequently overlooked tax benefits that may apply to you. Some of these were extended to 2017 in a special bill passed by Congress in the middle of February 2018, so if you filed your 2017 return before that date or used a preparer who does not keep up with changes, there’s a chance one or more items may apply to you. Please note that the items listed below apply to years 2015 through 2017.
  • Above-the-line Tuition Deduction – Allows a deduction of up to $4,000 for higher education tuition without itemizing deductions. 

  • American Opportunity Credit – Provides a tax credit of up to $2,500 for the first four years of your or your qualified child’s higher education tuition and qualified expenses, even if paid by someone other than you. 

  • Lifetime Learning Credit – Offers a credit of up to $2,000 for tuition and qualified higher education expenses for family members. 

  • Student Loan Interest – A deduction of up to $2,500 for student loan interest paid, which is deductible without itemizing deductions. 

  • Mortgage Insurance Premiums – Premiums on contracts issued after 2006 can generally be deducted as home mortgage interest when itemizing deductions. 

  • Home Energy Efficient Improvement – A tax credit of up to $500 for making certain home energy improvements. 

  • Electric Vehicle Credit – A credit of up to $7,500 for purchase of plug-in electric vehicles, if the manufacturer has not exceeded the 250,000-unit sales limit for qualifying for the credit. 

  • Excess FICA – If an individual had more than one employer during the year and the FICA withholding for the year exceeded the overall FICA withholding cap, the excess is refundable on the 1040.
  • Consumer Interest – Generally, consumer interest is not deductible. But if a loan is used to purchase a vehicle or other property used both for business and personally, the portion of the interest allocable to business is deductible as business interest (does not apply to employee business expenses). 

  • Surviving Spouse Filing Status – For the two years after the death of a spouse, a surviving spouse with a dependent child can continue to benefit from the married filing joint tax rates. 

  • Head of Household Filing Status – A married individual, separated and living apart from their spouse for the last 6 months of the year, can use the more beneficial head of household filing status, which is normally only available for unmarried individuals. 

  • Saver’s Credit – For lower-income taxpayers making retirement plan or IRA contributions, the saver’s credit provides a credit of 10, 20 or even 50 percent of the taxpayer’s contribution to a retirement plan. The overall cap on this credit is $1,000.

  • Medicare Premiums – Frequently overlooked either as a medical itemized deduction or for the self-employed medical insurance deduction are the Medicare premiums withheld from Social Security benefits. 

  • Penalty Abatement – Professional tax preparers use a number of tax provisions to have various tax penalties abated, including the late filing penalty, ACA penalty for not having health insurance, penalty for not withdrawing the required minimum amount from a pension plan or a traditional IRA, early retirement plan or IRA withdrawal penalty, negligence penalty and more. 

  • Overlooked Points – Points paid for the purchase of a home are generally deductible as part of the itemized deduction for mortgage interest.
  • State Tax Refunds – The amount shown on Form 1099-G, the state tax refund a taxpayer received from their prior year’s return, may not be federally taxable or may be only partly taxable. Examples include when a taxpayer claimed the standard deduction on their prior year’s federal return or if their prior year’s federal tax included the alternative minimum tax. 
These are just a sampling of items frequently missed by taxpayers and novice tax preparers. If you would like a professional review of your 2015, 2016 and 2017 returns looking for overlooked tax savings, please give this office a call.

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Get to Know Prestige Accounting Services Group (previously Prestige Wealth Accounting Group)

Offices in Flemington, NJ and Califon, NJ

Our Mission: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we are on a mission to redefine the tax experience for individuals and small businesses. With a focus on personalized service, strategic planning, and expert guidance, we aim to empower our clients to succeed financially with confidence and ease.

Expertise in Action: With a wealth of experience and a team of dedicated professionals, we specialize in individual and small business tax preparation. While we excel in all areas of taxation, our passion lies in serving the unique needs of small business owners in New Jersey. We understand that small business taxation requires specialized knowledge and attention to detail, which is why we go above and beyond to ensure our clients receive the guidance and support they deserve.

Tailored Solutions for Every Client: Whether you're a high-net-worth individual seeking comprehensive tax planning or a small business owner in need of accounting and bookkeeping assistance, we have the expertise to meet your needs. Our team takes the time to understand your specific situation and develop customized solutions that align with your goals and objectives.

Why Choose Us?: What sets us apart from other New Jersey tax firms is our commitment to excellence and innovation in the field of taxation. We don't just prepare tax returns; we provide strategic insights, proactive planning, and actionable advice to help our clients achieve their financial goals. With a team of two CPAs, an EA, and an ERO, we have the expertise and resources to deliver exceptional service and results.

Your Success is Our Priority: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we measure our success by the success of our clients. We are dedicated to building long-lasting relationships, providing unparalleled service, and helping our clients thrive in today's ever-changing tax landscape.

We can't wait for you to experience the Prestige Accounting Services Group (previously Prestige Wealth Accounting Group) difference.

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