Category: Tax Deductions and Credits

Deductions and credits may be similar but they are far from identical when it comes to your tax return. A tax deduction is a qualifying expense that decreases your taxable income. On the other hand, tax credits allow taxpayers to reduce their tax due to the IRS, dollar-for-dollar. You subtract the amount that the credit is worth from your tax liabilities. If you had to compare the two, a tax credit is more valuable on your tax return. Want to learn more about different credits you are eligible for or tax expenses you can claim? PriorTax tells you about expenses you can claim.

Archive for the ‘Tax Deductions and Credits’ Category

Hawaii Announces Some Details on Wildfire Tax Relief Plan

Posted by admin on September 7, 2023
Last modified: September 8, 2023

Wildfire Victims May be Eligible for Hawaii Tax Relief

Taxpayers affected by the wildfire disasters in Hawaii counties may now receive various forms of Hawaii tax relief, according to an announcement from the state’s Department of Taxation (DOT). The DOT has released details about how those affected can take advantage of this tax relief, which this article will go through in detail.

Hawaii DOT will give special consideration on a case-by-case basis to those taxpayers adversely affected. This includes extensions for tax filing and paying various taxes, such as general excise (sales tax), transient accommodations, net income, tobacco, and liquor; waivers of penalties and interest; or any other form of assistance due to interruptions in mail delivery.

For those submitting their taxes via paper, write “2023 Wildfire Relief” on the top center of the return. Meanwhile, when filing electronically through Hawaii Tax Online, one must send a message selecting “I have a 2023 Wildfire Relief Question” in order to receive relief.

Those needing assistance due to the wildfire disaster should be sure to include a concise explanation when filing for tax relief. This statement should articulate what kind of help is requested and how the devastation has impacted their ability to meet tax obligations.

Individuals, businesses, and others can be considered “adversely affected taxpayers” when they cannot file tax returns or make payments due to the wildfire disaster.

The governor has declared certain areas to be disaster zones. Consequently, any funds from a property or casualty insurance policy resulting from the damage or loss of inventory utilized in a business within such an area are excused from General Excise Tax (GET).

For those affected by the Hawaii wildfires, there are specific tax relief regulations regarding Payment and Filing Relief and Extensions, Collections Relief and Extensions, and Taxability and Deduction.

Hawaii Tax Relief

Details on Payment Relief, Filing Relief, and Filing Extensions

Tax Filing Deadlines Extended for All Taxpayers?

Whether tax deadlines are extended for every taxpayer cannot be answered in the affirmative. Instead, the Department of Taxation (“Department”) has established that requests for tax filing extensions and waivers of late payment penalties and interest can be assessed on a case-by-case basis.

How do I request a waiver of penalties and interest from the Tax Relief?

Are you facing financial hardship due to the Hawaii wildfire disaster? Requesting a waiver of penalties and interest could be the solution. When filing by paper, add “2023 Wildfire Relief” to the top center of your return. Additionally, include with your tax filing a statement that explains why you have been adversely affected by the event.

When electronically filing, please be sure to get in touch with a free dedicated tax professional to help you explain how the wildfire disaster is negatively impacting you to the DOT of Hawaii.

I could not file on time due to a lack of electricity or internet due to the wildfires. Is that a good cause for a tax filing extension request?

Absolutely. Due to the devastating wildfires, tax filing can be delayed as a lack of electricity and internet made it impossible. Showing that you were affected by the fires would make you eligible to request a waiver or extension on penalties or interest.

Will this tax relief stay available? How soon will the DOT stop accepting requests for tax relief?

For what duration is relief available? As long as the Director determines necessary to counteract the effect of the wildfires, the Department will carry on considering requests for aid.

Do I still need to pay estimated taxes?

Should I submit estimated taxes? The answer is a resounding Yes. Even with the aftermath of the 2023 Hawaii wildfires, you may request extra time to make the necessary payments. To learn how to go about it, get in touch with our free, dedicated tax professional.

Is there any relief for taxpayers impacted by the Maui and Hawaii wildfires already under an installment payment agreement with the DOT?

Taxpayers will be obligated to resume installment payments following their payment plan. For further details, please get in touch with a dedicated PriorTax Tax Professional for free support from start to finish.

Taxpayers must restart their installment payments in order to comply with their current plan. Please reach out to your assigned collector for more info. If you do not have a contact detail, such as an email or a number, please call a relevant office and ask them to contact your collector.

Is tax relief available for a taxpayer with a property lien impacted by the Hawaii wildfires?

Those property owners affected by the wildfires in Hawaii may be wondering how they can access relief from their property lien dues. At present, the Department will not be providing a release of these liens. However, they could qualify for other forms of assistance, such as waiving interest during this difficult period. Get in touch with a free, dedicated Tax Professional to support your tax relief.

Details on Taxability and Deduction

Damages and Losses from Hawaii Wildfire Enable to Deduct from Tax Returns?

Which damages and losses can I declare on my taxes? We recommend that taxpayers speak with a dedicated tax professional or the IRS to determine suitable tax deductions. Concerning Hawaii income tax, the DOT aligns with section 165 of the Internal Revenue Code, addressed in Publication 547 from the Internal Revenue Service. Please refer to Tax Announcement 2023-03, under section II, to further investigate casualty loss claims.

Is the tax relief taxable?

Regarding taxation, one question lingers: Are tax relief payments taxable? It varies depending on the source of the funds and the purpose for which they are used. To elaborate further, please look at Tax Announcement 2023-03 and section IV to learn more about disaster relief payments.

Are donations to Hawaii Wildfire tax deductible?

The answer is yes. You may deduct donations from your taxes, but only under certain conditions. All donations and gifts from registered and qualified non-profit organizations will be eligible for tax deductions. However, contributions made to individuals or unregistered groups do not qualify. It is necessary to provide proof of the donation to receive the deduction on your taxes.

IRS Announces Tax Relief for Hawaii Wildfire Victims

Posted by admin on August 31, 2023
Last modified: August 31, 2023

The Internal Revenue Service (IRS) has issued a declaration of tax relief to those affected by the wildfires that began on August 8, 2023, in parts of Hawaii. Individuals and businesses affected have until February 15, 2024, to file returns and make required payments. Consideration is given to victims of the wildfire destruction in these areas of Hawaii.

In response to the damage caused by the Hawaii wildfire, FEMA has declared a disaster in Maui and Hawaii counties. As a result of this declaration, those who live or operate businesses in the affected areas are eligible for federal tax relief.

In response to a declared disaster, it has been made possible for those affected to postpone their filing and tax payment deadlines. An example is when deadlines falling between August 8, 2023, and February 15, 2024, can be extended with special permission from the IRS.

The Internal Revenue Service (IRS) has issued a grace period extending to February 15, 2024, for all affected individuals and businesses who need more time to file tax returns between January 1, 2021 and April 18, 2023. This stipulation includes 2022 individual income tax returns, with an original due date of October.

Hawaii Wildfire

The February 15, 2024, deadline also applies to:

  • Quarterly estimated tax payments, which are normally due on September 15, 2023, and January 16, 2024.
  • Excise tax returns and quarterly payroll which are normally due on October 31, 2023, and January 31, 2024.

Businesses whose 2022 tax extension dates have elapsed or will soon elapse by September 15 (i.e., calendar-year partnerships and S corporations) and October 16 (calendar-year corporations) are eligible for the February 15, 2024 deadline for filing taxes.

On or after August 8, 2023, and before September 7, 2023, any late payroll or excise tax payments will receive abatement as long as the deposit is made by the said date.

When a taxpayer is subject to a late tax filing or late payment penalty notice from the IRS that had an original or extended due date during the postponement period, they should contact the number on the notification for the IRS to waive any charges.

Taxpayers affected by a covered disaster area can receive filing and payment relief from the IRS, provided they reside or have business in those areas. Those located outside of such regions should contact a dedicated PriorTax Tax Professional to benefit from this tax relief.

Who are Affected Taxpayers from Hawaii Wildfire?

Individuals and businesses affected by the covered disaster area, including tax-exempt organizations, are eligible for postponement of time to file tax returns, pay taxes, and perform other time-sensitive acts. This also extends to those who do not physically reside within the area but whose records necessary to meet a deadline lie within it. Thus, they, too, are entitled to some form of relief.

All those providing and receiving help during times of tragedy have the right to compensation for any damages incurred as a result of the disaster. That is why anyone affiliated with an official government or charitable organization assisting people affected by a disaster area is eligible for relief.

Taxpayers affected by the August 8, 2023 date will receive some relief from the Internal Revenue Service (IRS), as they can now file all relevant tax documents until February 15, 2024. This includes individual and corporate income tax returns, partnership and S Corporation returns, estate/gift/generation-skipping transfer taxes, annual information for tax-exempt organizations, and employment/excise taxes with either an original or extended due date up through February 15 of this year.

Taxpayers with estimated tax payments due between August 8, 2023, and February 15, 2024, now have an extension until February 15, 2024, to make those payments without facing any penalties for late payment. Those estimates must be paid before the end of that period to avoid penalty charges.

Declaring Casualty Losses from Hawaii Wildfire

For individuals impacted by a federally declared disaster, the option to declare casualty losses on their federal tax return for either the year of the occurrence or the previous year is available. Taxpayers who have selected this option and are reporting these losses on their 2022 returns have extended time until October 15, 2024, to make that choice.

Hawaii Wildfires have caused some taxpayers to seek out the disaster loss on their tax return. Make sure to state “Hawaii Wildfire” and the FEMA disaster declaration number, DR-4724-HI, at the top of your form. A PriorTax Tax Professional can assist individuals through this process from start to finish.

Other Possible Tax Reliefs

Taxpayers affected by disasters may find financial aid within their retirement plans or IRAs. For example, they could qualify for a special disaster distribution to spread the income over three years and avoid the extra 10% early distribution tax.

Those who pay taxes could qualify for a hardship withdrawal in certain instances. Every plan or IRA has separate rules and guidelines that must be adhered to by its participants.

The IRS may provide additional disaster relief in the future.

Taxpayers dealing with the repercussions of a disaster that the IRS has contacted in regard to a collection or examination should make their situation clear to the agency so that they can be given appropriate consideration.

Four Top Tips on Getting More Tax Refund

Posted by admin on August 24, 2023
Last modified: August 25, 2023

How can you maximize your tax refund this year? Are you ready to maximize the tax refund you’ll get this tax season? Taking advantage of all available tax breaks is a great way to reduce your liability and, as a result, make the most of your return. Here are four tips to consider when seeking a larger refund – remember that for more long-term financial planning, consulting with an experienced advisor should be your top priority.

Let’s Maximize Your Tax Refund.

Are you hoping to get the most out of your tax return? Although it may be tempting to overpay in taxes, professionals do not advise this. This results in a refund from the government and can mean that your money is going to them instead of you. A better option is to adjust the amount taken out each month so that when tax season arrives, you’re not receiving a large return – allowing you to put the extra cash toward investments or other necessities during the year.

Are you hoping to get a bigger refund at tax time? Here are four actions that can help you maximize the money coming back from your tax return.

maximize tax return

Firstly, Filing Status

Choose Your Tax Filing Status Wisely.

Your filing status can majorly affect the size of your tax refund, both for single and married individuals. For couples that are wed, filing joint taxes is usually the way to go. However, it might be more beneficial to file separately in some instances.

An option to consider when filing taxes is filing separately. This could be beneficial when one or both spouses have a lot of medical or business costs. By doing this, your adjusted gross income can get reduced, and the deductions you can make may increase due to them exceeding a percentage of your income.

When considering your filing status, it is important to look at the potential tax credits you may need to include by filing separately. To fully understand which option could be more beneficial for you, do some calculations or use a free tax return calculator to gain an estimate.

For those who are unmarried, it is worthwhile to investigate whether you are eligible for head of a household standing. Typically, this requires that more than half of the upkeep expenses for your home and applicable dependents have been shouldered by you in twelve months.

When it comes to tax season, the existence of a dependent can hugely impact your return. This could be a child or an elderly parent – anyone you support financially. Filing as head of household is worth considering since doing so grants you access to more generous deductions than single filers receive.

Second, Tax Credits

Maximize your tax refund with tax credits. Tax credits are a great way to decrease the overall amount of taxes owed to the IRS. On a dollar-for-dollar basis, your tax bill can be significantly lowered when these credits are utilized. For instance, say you owe $6,000 in taxes but then take advantage of a credit worth $1,000 – that reduces your total liability to just $5,000.

Common tax credits include:

  • Tax credits can be a great way to reduce taxes owed. A popular type of credit is the Earned Income Tax Credit, which allows eligible tax filers to receive up to $6,728 for three or more qualifying children in 2021 and $6,935 in 2022.
  • One of the most well-known tax credits is The Child and Dependent Care Tax Credit, which can reimburse up to $3,000 for one dependent or $6,000 for multiple dependents. This credit assists with childcare costs incurred during the year.
  • Taking advantage of tax credits can be a great way to reduce your taxes. One popular option is the Child Tax Credit, which provides up to $2,000 per dependent in 2022 and was worth $3,600 in 2021. Your income will determine how much you may receive from the tax credit.

The amount of tax credits you can claim may be affected by various factors, such as income, filing status, and the presence of dependents. Other considerations for those seeking to use educational-based tax credits include timing and the eligible expenses.

Subsidies and other benefits may be available to those who opt to make certain energy-efficient upgrades in their homes. For instance, the Premium Tax Credit can help cover some expenses associated with purchasing a health care plan through the federal exchange.

Third, Tax Deduction

Tax Write-Offs Should not be Ignored. Although credits often yield a larger tax return than deductions, taking advantage of appropriate deductions is important. Deductions have the impact of reducing the amount of income that is subject to taxation, as opposed to just cutting down on what you owe in taxes.

Filing taxes can be confusing, particularly with the Trump tax plan’s doubling of the standard deduction. Generally, this makes taking the standard deduction the simpler option; however, itemizing may be more beneficial in cases where many deductible expenses are incurred.

The IRS allows you to deduct various costs related to work or other activities. Mileage, lodging, and home office expenses are deductible for self-employed individuals, just as donations to charitable organizations and mortgage interest can be taken off your taxes. Even student loan interest and gambling losses can be deducted – but the amount of each deduction does vary, so it’s important to keep appropriate records like receipts or bank statements to support your claims.

Fourth, the IRA

Putting away funds in a conventional IRA is an excellent way to grow your savings and take advantage of the extra tax benefit. You can contribute to your IRA for the past tax year until the April filing date and be eligible for a full or partial deduction. This kind of deduction goes above the line, permitting you to still claim it even without itemizing.

Regarding your retirement savings, a few tax credits are available that could help reduce your taxable income. One such credit is the Retirement Saver’s Credit, which applies to contributions to both traditional and Roth IRAs. However, your income must meet certain criteria to be eligible for this credit.

Many of us look for good ways to increase tax refunds during the tax season and make every penny count. Knowing which tax benefits you are eligible for can help you achieve that goal. Understanding the available deductions and credits could put more money back into your pocket.


Maximizing your tax return can be tricky business, but it is made much easier when working with the experts at PriorTax. Team of Free dedicated Tax Professional is knowledgeable and experienced in helping clients get every tax deduction and tax credit they qualify for – often resulting in a larger tax refund! Whether you’re filing as an individual, family, or even a small business owner, PriorTax will provide trustworthy guidance throughout the entire process so that you don’t have to feel overwhelmed while tackling your taxes.

How to Maximize Your Tax Refund with Form W-4

Posted by admin on August 10, 2023
Last modified: August 10, 2023

Maximizing your tax refund relies upon a few easy processes, research, and some preparation. Examining your tax situation, involving your partner when finishing up your tax form W-4s, and taking advantage of certain tax credits can assist in boosting the size of your refund. Additionally, PriorTax free dedicated Tax Professional can help you determine which credits give you the greatest tax refund.

Review your Form W-4 with our Tax Professional for Tax Refunds Over Looked

Before beginning a new job, your employer requires you to fill out Form W-4. This form conveys how much federal income tax needs to be taken from your paycheck. The quantity of taxes deducted from wages depends on the combination of income and credits declared in the W-4 document.

Are you reviewing your W-4? It’s time to decide. Are you aiming for a bigger refund or a bigger paycheck? With less taken out of each pay period, you can count on receiving larger wages throughout the tax year.

tax refund

Elements to review when amending your Form W-4 may include.

When filing your W-4, there are crucial elements to take into account. By claiming credits such as the Child Tax Credit or the Other Dependent Credit, you are reducing the amount of money being withheld from your paycheck.

When you are in the process of filling out a Tax Form W-4, there are several things that you must keep in mind. For starters, you may need to adjust the amount of withholding on your taxes should you have multiple sources of income, like an extra job or investments.

When filling out your W-4 form, there are a few points that you should bear in mind. These include the possibility of withholding extra money from each paycheck for income tax purposes.

By indicating more income on your W-4 form, your paychecks will be smaller since greater tax amounts will be taken out. This increases the possibility of withholding too much, which may result in a bigger tax refund.

When you anticipate certain credits or deductions, the potential implications are clear; bigger paychecks and possibly owing some extra tax or receiving a smaller refund. To make sure you enter accurate information on your W-4 form, consider using a our Prior Tax Calculator. It is designed to provide a reliable estimate of what should be entered.

Reconsider your Tax Filing Status.

The selection of a filing status can have an effect on getting a refund. Your filing status decides several important elements, such as your standard deduction, whether you have to file taxes, the credits available to you, and how much tax you pay or refund you get.

When filing their taxes, individuals have multiple statuses to select from. Most commonly, people opt for married filing jointly or separately, single person, or head of household designations.

Having an experienced, dedicated Prior Tax Professional on your side is essential to ensure the best outcome for you, from the beginning of the process through to completion. They will help you decide which options work best for your particular circumstances to maximize your tax refund.

Look into Claiming the Earned Income Tax Credit

Reap the rewards of the Earned Income Tax Credit. Are you a working family, an independent contractor, or someone with moderate to low income? Then you may be eligible for the Earned Income Tax Credit. This tax break reduces taxable liability and could result in a sizable refund!

In order for you to be qualified, the following criteria must be met: you should have a valid Social Security number and be either a U.S. citizen, a year-long resident alien, or a non-resident alien married and filing jointly with an American citizen or resident alien. Additionally, there must be verifiable income from self-employment, an employer, or working on a farm, not including any person being claimed as a dependent or child of another individual. Lastly, those in the age range between 25 and 65 living in the United States for at least half of the year are eligible.

And in order to receive the EITC, you must file a tax return, even if you owe no taxes, which you can read more about here.

Have you Claimed the Child and Dependent Care Tax Credit?

Make sure you take advantage of the Child and Dependent Care Credit. Available to those with a qualifying child or dependent, this credit is based on a percentage of what you paid for care-related expenses.

As of the 2022 tax year, a maximum amount of $3,000 in expenses can be claimed by one individual and $6,000 by multiple. It is important to remember that any dependent care benefits provided by an employer must be factored into this deduction total.

Important Qualifications

Are you the parent of an individual who is 13 or younger? Or do you have someone dependent on you due to physical or mental impairments and living in your household for the majority of the year? How about your spouse, who is unable to look after themselves and reside with you throughout the year? These may all be qualifying individuals.

Some Other Criteria Must be Considered.

In order for you, as a parent or guardian, to be eligible for the credit, there are various conditions that must be fulfilled. 

It is necessary that your filing status is not married, filing separately, and none of the caregivers are your spouses or parents of the child. Moreover, each dependent being claimed must have a valid Social Security number. As well you must provide the full name, address, and Social Security number of all care providers.

The American Rescue Plan set to be effective in 2022 brings forth some noteworthy modifications to the Child and Dependent Care Tax Credit. The plan markedly enhances the expense amount that can qualify as creditable, lessens the impact of income levels on it, and makes it completely refundable. This implies that you can claim this tax credit regardless of whether or not you owe the government taxes – something that has yet to be possible.

In a nutshell

Picking the right tax filing status related to your circumstances can reduce your taxes and amplify the tax refund you will receive. Utilizing our Prior Tax Calculator is an ideal way to forecast what needs to be entered on your W-4 and adjust the return amount when tax preparation rolls around. Should you qualify, claiming the Earned Income Tax Credit can lessen your tax bill and potentially generate a refund even when no taxes are owed?

Ensure you get the most from your tax return by leveraging a dedicated PriorTax Tax Professional. With our support, get started-to-finish service and never worry about filing with confidence. Our Free Dedicated Tax Professional helps you through the process with expert guidance and assistance. Answer straightforward questions and benefit from our guarantee of maximum refunds. However, you choose to handle it, know that PriorTax will take care of everything so that you can relax this tax season.

Do I Need Tax Return Amendment?

Posted by admin on July 27, 2023
Last modified: July 28, 2023

You’ve noticed errors or exclusions made on the tax return? It’s possible to do tax return amendment after submitting your original tax filing. Normally, the IRS would catch any mistakes during processing, but in certain scenarios, you may need to file a tax amended return in order to make corrections or make other modifications to the tax return itself.

This year, some of the changes to tax laws set by Congress apply to previous years’ taxes. This raises the question of whether you should go ahead and file an amended tax return or not. Understanding how to redo your taxes is key in determining which option is best for you.

tax return amendment

Do You Need to Revise Your Taxes This Year?

Have you ever submitted your tax return and discovered you’d made a mistake or learned new information that would alter the outcome? You may have asked yourself, is it possible to redo my taxes?

With the enactment of numerous new tax rules for 2018, it is important to consider whether it could be beneficial for you to submit an Tax Return Amendment. Many of us have confronted this issue before. To clarify matters, here’s a guide on filing an amended tax return and the benefits it could bring.

It is important to file an amended return in certain scenarios. This includes when corrections or omissions are needed to your income, a change of filing status, modifications to deductions, and the desire to apply for or adjust a tax credit.

Taking the time to submit an amended return can be a worthwhile effort. It ensures your tax return is up-to-date, enabling you to get the most out of any potential refund or lower what you owe. Moreover, it will reduce the chances of drawing attention from the IRS in the form of audit notices.

A Few Tax Return Amendment Scenarios

Scenario 1. You filed your taxes and then received another W-2 or other income statement.

In some cases, after you have already submitted your tax return, a new income statement could appear. This could include a W-2 from a job held only for a short period of time or even an interest statement from an account you had completely forgotten about. Even though the amount on the form may be small, it can still influence how much you owe in taxes.

Before filing your taxes, you must report all of your income for that year in accordance with IRS regulations. One way to do this is to amend your tax return, and it’s important to ensure you have received all necessary documents first. To comply with legal requirements, employers and businesses must send out all income statements such as W-2s or 1099-MISC by January 31st of each year.

Scenario 2. You missed claiming a credit or deduction you were eligible to receive

Forgetting to claim a credit or deduction can be costly when it comes to taxes. Even though you have the ability to take advantage of various credits and deductions that could lower your bill, not claiming them might mean losing out on money. It’s possible to file an amended return in order to get those dollars back.

When you have paid college tuition during the tax year, there are two credits that could potentially be claimed: the American opportunity tax credit and the lifetime learning credit. Filing your 1040 is not enough, though – an amendment needs to be filed in order to claim educational credits.

Major Tax Breaks from Tax Reform

Tax Reform Aids Taxpayers with Tax Breaks

Taxes on any income and gains must be paid as part of the taxation system. Consequently, in order to incentivize certain activities that are beneficial for society, Congress has implemented tax breaks which can lessen the overall duty a taxpayer is obliged to pay. Therefore, it is highly recommendable to get an up-to-date understanding of all changes, credits, and extensions prior to submitting an Amended Tax Return form.

How To File a Tax Return Amendment

Need to make some adjustments? Filing an amended return is the way to go. To get started, you’ll fill out Form 1040-X, Tax Return Amendment, and attach any corrections or additional documents that weren’t included with your original return. Doing so will bring your filing up-to-date with accurate tax information. Changes to federal returns filed in 2019 and later can be done electronically.

As laid out by IRS regulations, you have up to three years from when your original tax return was submitted to submit an amended return with a claim for tax refund. Additionally, two years is also allowed for filing after outstanding tax has been paid. It should be noted that any returns sent prior to its due date (with or without extensions) are considered as having been filed on that day. Furthermore, withholding taxes from sources such as a W-2 is counted as payment towards taxes on their due date.

Since the implementation of tax reform, it is crucial to address any issues that have arisen as a result. Filing an amended return is the best way to rectify mistakes and fix oversights. Therefore, it is essential to act promptly in order to set yourself up for success in the future.


In order for adjustments or corrections of a previously filed tax return, the appropriate form is Form 1040-X: Amended Tax Return. This must be accompanied by any documents that were not included in the original submission. Since 2019, amended federal tax returns can also be lodged electronically.

In the event of an oversight or mistake on your original submission, filing an amended tax return can be a wise move. This will allow for revision in terms of income declared, filing status, deductions taken, and claiming/correcting any tax credits owed. According to the IRS rules, however, anyone wishing to claim a refund must submit their amended return within three years from when they originally filed the return – OR – two years from when they settled their outstanding taxes (whichever is later).

Get your taxes done efficiently and accurately with a free PriorTax Dedicated Tax Professional. Whether you prefer having an expert guide you through the process from start to finish or taking advantage of the easy-to-use tool for self-filers, you can trust that PriorTax will guarantee your maximum refund. With our help, filing your taxes can be a breeze – answer straightforward questions, and we’ll ensure everything is taken care of so that you can rest assured knowing it’s been done right.

Student Loan Interest and Tax Form 1098-E

Posted by admin on July 20, 2023
Last modified: July 21, 2023

Are you aware of the Tax Form 1098-E for Student Loan Interest? For individuals currently repaying a student loan, Tax Form 1098-E may be mailed out from each lender. This document displays the amount of interest paid for the year. Taking advantage of tax deductions on federal tax returns is possible with this tax form, but more is needed to guarantee qualification to do so.

How can Tax Form 1098-E help you?

The Tax Form 1098-E will be sent to you by lenders when you have made payments of $600 or more in student loan interest during the year. This amount is taken from all loans a borrower has with the same lender, though it can be broken down into each separate loan. The sum shown in box 1 of Tax Form 1098-E shows a person’s total interest payments for that tax year.

How Can You Get Tax Deduction from Student Loan Interest?

Knowing the right moment to tax deduct student loan interest is important. This particular tax deduction can be taken as an adjustment while working out your adjusted gross income, otherwise known as AGI. It’s worth noting that you are not expected to itemize your tax deductions for this option to be available.

In order for your student loan interest payments made during the year to be tax deductible, they must have been taken out by you, your dependents or your spouse in order for them to take classes. When filing taxes separately or as a single filer with an adjusted gross income over $85,000 for 2022, or $175,000 when married and filing jointly, it is impossible to claim any student loan interest deduction. Modified adjusted gross income (MAGI) takes the AGI figure and returns certain tax deductions.

Preparing and filing your taxes doesn’t have to leave you exhausted. PriorTax takes the heavy lifting out of any calculations; all you need to do is answer some simple questions and leave the rest up to us, quick and easy. Our free and dedicated PriorTax Tax Professional will take care of putting all your answers onto the relevant tax forms.

student loan interest

How Much of Student Loan Interest is Tax Deductible?

What is the tax deduction for interest expenses? No matter the total sum paid in interest, you are eligible to deduct up to a maximum of $2,500. Those benefitting from this tax break should report the deductible amount on Schedule 1 as an alteration to their taxable income. Tax Form 1098-E provides a comprehensive breakdown of the reported amounts. However, it is still possible to include further student loan interest payments, which were not featured on the form. These additional payments must have been made towards a qualified loan for them to be eligible for tax deduction.

Checking the Box 2 from Tax Form 1098-E

If Box 2 of the Tax Form 1098-E is ticked, it indicates the quantity mentioned in Box 1 does not include the loan’s initiation fees and/or any capitalized interest. Nevertheless, this should apply to loans obtained before September 1st, 2004.

When you take out a loan, the lender may charge you a fee known as the origination fee. This amount is usually determined as a percentage of your loan and is factored into the total funds disbursed. Additionally, you can include a portion of this fee in your tax deductions for student loan interest. By dividing the origination fee by the years it takes to pay off the loan, one can determine how much they can claim every year when filing their taxes.

When it comes to unpaid interest, should the lender opt to add it onto the principal loan balance (capitalization), the deductible portion of that amount must be figured out similarly to when dealing with an origination fee.

Ensure your taxes are done correctly with the help of a Dedicated PriorTax Professional. Give us a call at 877-289-7580 during our regular office hours to get one of our specialized tax professionals on your side. Alternatively, you can take only 10 minutes to answer simple questions and be guided through the process of filing your taxes confidently using PriorTax. Whichever way suits you best, we guarantee that you will receive the maximum refund possible.

Energy Tax Credit in 2023

Posted by admin on July 13, 2023
Last modified: July 13, 2023

Does Your Home Improvement Expense Qualify For Energy Tax Credit?

Homeowners can now take advantage of extended energy tax credit for home improvements promoting efficiency and renewable power. The tax credits, available through 2034, are even being expanded starting in 2023.

What purpose do Energy Tax Credits serve for home improvements?

In an effort to make homes more energy efficient, the government has extended two tax credits available for home improvements and residential clean energy equipment. The Inflation Reduction Act of August 2022 has increased the timeline and financial benefits associated with these tax incentives.

Energy Efficient Home Improvement Tax Credit

The Inflation Reduction Act recently extended and expanded the Tax Credit for Home Improvements that are Designed to be More Efficient with regard to how they consume power. Previously this credit had a lifetime limit of $500 and was known as the Nonbusiness Property Credit, but it has now been renamed. It will remain in effect until December 31, 2022.

Starting January 1, 2023, and up until January 1, 2033, households may be eligible to receive a tax credit of up to $1,200 annually under a new law – known as “Energy Efficient Home Improvement Credit” – which amended an existing one.

energy tax credit

The new tax credit has a major advantage over its predecessor; it provides an annual limit rather than a lifetime one. In other words, by spacing out qualifying home improvements over a decade, you can claim up to $12,000 in returns on your taxes instead of just the $500 allowed before.

Making smart investments in heat pumps, biomass stoves, and boilers may be rewarded up to an extra $2,000 each year. This presents a great opportunity for individuals to take advantage of the financial incentive for greener living.

What are Energy Efficient Home Improvement qualifying home improvement for getting Energy Tax Credit?

Do certain home improvements qualify for the Energy Efficient Home Improvement energy tax credit? Starting from January 1, 2023, this tax credit can be equal to either 30% of the amount spent on eligible projects or up to an annual maximum of $1,200.

When it comes to energy-efficient home improvement credit, a current maximum of $3,200 applies annually. This includes an applicable credit limit of $1,200 and a separate aggregate yearly credit limit of $2,000 for electric or natural gas heat pump, water heaters, electric or natural gas heat pumps, and biomass stoves and boilers.

Residential Clean Energy Tax Credit

Taxpayers can take advantage of a substantial financial benefit with the Residential Clean Energy (RCE) Credit, which was extended and increased by Congress through its passage of the 2022 Inflation Reduction Act. This credit is equivalent to 30% off eligible costs for residential renewable energy amenities.

Through 2034, Congress passed an amendment to existing energy credit legislation: named Inflation Reduction Act. This bill altered applicable percentage rates as well as included battery storage technology in eligible expenses.

A tax credit is available for property brought into service between 2021 and 2033. This incentive gradually phases out over time – 26% in 2033, 22% in 2034, and 0% after December 31 of that year.

Residential Clean Energy Credit Qualifying Equipment?

The Residential Clean Energy Tax Credit is for users of solar, wind, geothermal, and fuel cell. This includes the installation of photovoltaics for the production of electricity, as well as adding a solar-powered water heater to one’s residence. To be eligible for the credit, a solar system must cover at least half of the home’s water-heating needs – hot tubs and swimming pools do not qualify.

For residential use, various technologies are available to produce electricity. These include up to 100-kilowatt turbines driven by the power of the winds. These geothermal heat pumps adhere to Energy Star standards set by the federal government, fuel cells utilizing a renewable resource such as hydrogen for a minimum of 0.5 kilowatts output, and battery storage systems.

Does the Residential Clean Energy Tax Credit Cover Roofing Expenditures?

When making improvements to one’s roof in order to mount solar panels and related hardware, it is important to note that these expenditures are typically not eligible for the Residential Clean Energy Credit. This is because they primarily serve as a means of upkeep or structural stability.

When it comes to tax savings, investing in solar roofing can be a great option. Solar roofing tiles and shingles are an excellent choice as they offer both protection for your home and the opportunity to generate solar electric energy. These investments may qualify you for a federal tax credit.

How Does Energy Tax Credits Work?

The federal government offers tax credits to citizens who invest in products and services that are designed to be more efficient with regard to the use of natural resources. These credits can be used to help reduce the cost of improvements such as new insulation or window replacements. Additionally, solar panel systems and other renewable power sources may also qualify for tax credits, making them more accessible to homeowners. This program is a great way for people to save money while doing their part in protecting our environment.

Are Energy Tax Credits Refundable?

Tax credits for the use of renewable energies are not refundable. This implies you could diminish your total tax to nothing, assuming you have a sufficiently large credit amount. However, receiving any additional credit as payment on your return is impossible when the sum surpasses the total charges due. Any unused renewable-based credits stated on your return can be transferred forward and counterbalance tax debt in upcoming years.

Will these energy efficiency tax credits make home improvements more cost-effective?

When it comes to home improvements, energy efficiency is certainly something that should be taken into consideration. These upgrades can help reduce those pesky heating and cooling bills, and they also come with potential tax credits that further enable homeowners to save money on their purchases. Therefore, when used in conjunction with cost-saving home improvements, these credits can be a great tool for lowering the overall cost of living.

In Conclusion

Those wishing to improve their homes in an energy-efficient manner may be eligible for a tax credit through Energy Efficient Home Improvement Credit.

Homeowners have a great opportunity to save money at tax time with Residential Clean Energy Credits. These credits can be applied toward specific pieces of equipment, such as solar panels, wind turbines, geothermal systems, and fuel cells.

The solar, wind and geothermal equipment installed in both your principal residence and any other home used as a residence can be claimed for the credit. However, fuel-cell equipment is eligible to acquire this credit exclusively when placed in the main house.

PriorTax offers an easy solution to get your taxes done right; our free dedicated Tax Professionals are here to help from start to finish. We guarantee our services will provide you with the highest return possible as we take the time to search for any and all available tax deductions and tax credits that you qualify for.

Unfiled 2019 Tax Refund to Claim Thousands in Tax Return

Posted by admin on July 9, 2023
Last modified: July 9, 2023

For unfiled 2019 tax refund: July 17, 2023 is the deadline.

The clock is ticking for 1.5 million Americans who have yet to file their tax returns from the year of 2019, missing out on potential refunds worth $1.5 billion. Those who still need to file must act fast, as July 17 marks the last chance to claim a tax refund, which could be in the thousands. Don’t leave money on the table.

In June, government officials issued their ultimate notification to approximately 1.5 million individuals throughout America who must submit a return for 2019 prior to July 17, 2023, in order to receive their respective refund.

Taxpayers have a three-year window within which to file and claim their tax returns; failure to do so results in the money being turned over to the U.S. Treasury. In line with this, July 17, 2023, must be marked as the deadline to ensure that all necessary requirements for properly addressing and dispatching a tax refund are met.

Eligibility for the Earned Income Tax Credit

Are you one of the low- and moderate-income earners who could be eligible to receive up to $6,557 from your 2019 income? The Earned Income Tax Credit (EITC) may provide you with an extra refund. So make sure to check your qualifications and see what bonus refund amount you are entitled to.

Those who are potentially eligible for EITC in 2019 had incomes below the following thresholds:

$15,570 if filing individually or $21,370 if filing jointly, for people without qualifying children

$41,094 if filing individually or $46,884 if filing jointly, for those with one qualifying child

$46,703 if filing individually or $52,493 if filing jointly, for people with two qualifying children

$50,162 if filing individually or $55,952 if filing jointly, for those with three or more qualifying children

The clock is ticking for those eligible for a tax refund in 2019, according to Danny Werfel, the IRS Commissioner. Taxpayers who still need to file their return from last year need to do so before July 17 or risk forfeiting any potential tax refunds. In light of the circumstances surrounding the current pandemic, the IRS urges anyone who may have overlooked filing their taxes to act fast and make sure they get what might potentially be a substantial amount back.

Danny Werfel, IRS Commissioner, has urged those who have neglected to file during turbulent times of COVID-19 to take hasty action before their last opportunity to acquire a considerable refund passes by. “People who may have overlooked filing during the pandemic should act quickly,” he said.

prior tax

According to IRS reports, unclaimed refunds from taxes typically amount to around $893. Those with lower or moderate income could potentially be eligible for up to $6,500 in Earned Income Tax Credit benefits, provided their income is suitable.

Concerning any outstanding balances, the IRS return may be put towards resolving financial obligations, including unpaid child support or student loans. It can also be used to cover taxes owed to the federal government or a state tax agency.

Need help with filing your tax forms for last year as well? PriorTax is here to provide assistance with experienced, free Dedicated Tax Professionals who are available by phone and online to file your prior year taxes.

Need to file a 2019 tax refund? 

It is estimated that by averaging all of these unclaimed refunds, the median reimbursement for taxes paid in 2019 would amount to $893.

With the July 17, 2023 deadline for 2019 refunds quickly approaching, it is important that taxpayers take the necessary steps now to ensure they have all the info they need to file before time runs out. The IRS reminds people that there are still ways to collect the data required to put together this tax return despite the fact that a few years have passed since 2019.

In order for you to receive your 2019 tax refund, the initial step is filing taxes for that year. Gather necessary documents from pertinent companies or organizations such as employers, banks, and any entities which gave you money in 2019. Additionally, the IRS website can request a tax transcript which can assist with what is needed for filing 2019 taxes.

For those who are missing vital documents like Forms W-2, 1098, 1099 or 5498 from 2019, 2020 or 2021, obtaining copies of the documents are possible. 

Here are some options:

Get your transcript online at provides a convenient solution for those needing forms from their employer or other payers. This free wage and income transcript can be easily ordered with the help of the online tool. Arguably, this is one of the most efficient options available to taxpayers.

People who need to access their wage and income information can submit Form 4506-T to the IRS. This form is known as a “transcript of the tax return” and reveals data from returns sent to the Internal Revenue Service, including Tax Form W-2, Tax Form 1099, Tax Form 1098, Tax Form 5498, and other contribution details.

Although the transcript may contain helpful information for filing a return, it is recommended to find other alternatives first due to the time-consuming nature of written requests. Processing can take several weeks, so planning ahead is essential.

More than $1.5 billion combined is owed in 2019 refunds.

Across the country, many taxpayers are owed overdue refunds from their states. In particular, people in California, Texas, Florida, New York, and Pennsylvania have thousands of unclaimed dollars waiting for them. But unless these individuals submit their tax returns to claim what is due to them, the IRS will keep the funds as part of the U.S. Treasury’s coffers.

Given the extenuating and unexpected circumstances of the COVID-19 pandemic, individuals have an extended period to submit their tax returns for the year 2019 and acquire any refunds they may be owed. The time limit has been moved to July 17, 2023 – a three-year window.

According to an estimate from the Internal Revenue Service (IRS), there is nearly $1.5 billion in unclaimed refunds. An exclusive state-wise appraisal gives a median potential refund for each state and approximates how many persons could be qualified for these payments. Nevertheless, actual amounts of refunds will rely upon a family’s personal tax situation.

With only days left to claim it, up to 1.5 million U.S. taxpayers may be eligible for refunds from 2019 taxes! You could receive hundreds or maybe thousands of dollars from tax returns, but time is quickly running out – you must file your 2019 tax return by July 17 in order to get your money back. Don’t miss out on this incredible chance! 

Reach out to your free Dedicated Tax Professional Now at strives to help taxpayers catch up on their tax filings and get current with the IRS. You can also catch up on your late taxes with PriorTax! Their 9.9/10 top rated tax application guides you with simple questions, and once done, our dedicated tax pros review your tax return and prepare it for filing. PriorTax is currently e-filing 2020, 2021, and 2022 tax returns.

Educator Expense Tax Deduction

Posted by admin on June 29, 2023
Last modified: June 27, 2023

What You Need to Know about Educator Expense Tax Deduction?

Are you an educator in need of tax relief? The Educator Expense Tax Deduction is a great option for teachers and certain academic administrators. This tax deduction allows them to reduce their taxable income by the cost of technology, supplies, and training expenses. This deduction will let you subtract up to $300 worth of qualified expenses from your taxes for 2022. Here’s all you need to know about taking advantage of this deduction on your next tax return.

Do you have any expenses related to your job as an educator? 

From purchasing crayons and books for your classroom to taking classes at your own expense, a tax deduction can help offset some of those costs.

Qualified expenses include purchases such as:

When it comes to making purchases, a few qualify as an expense. These include: 

Books and supplies necessary for the classroom setting, as well as technology and computer software, needed to be utilized in the process of educating students.

When it comes to educating yourself, there are certain expenses that you can claim a deduction for. Qualifying purchases fall into this category, and as an educator, you may even be eligible for the Educator Expense Deduction when it comes to professional development courses related to teaching, which your school or another organization has not reimbursed.

Educator Expense Tax Deduction

What are the Requirements for the Educators?

To be qualified for the Educator Expense Tax Deduction, educators must meet certain eligibility criteria.

To Qualify, You must:

  • Currently employed by a school providing classes determined by state law
  • Working as a teacher, instructor, counselor, principal, or classroom aide
  • Working with kindergarten through grade 12 students
  • Working at least 900 hours during the school year

Any teacher or counselor who meets the required work hours and purchases materials needed for their job could take advantage of the deduction. In particular, a first-grade educator working at a public school would qualify, as would a guidance counselor who bought supplies to assist students.

Unfortunately, those employed by or involved with preschools, homeschooling their children, or universities and graduate schools would not be able to benefit from this tax deduction.

A special tax deduction is available from IRS for married couples who are both educators under the Educator Expense Tax Deduction. In 2022, they can apply for a joint tax deduction of up to $600, with no more than $300 in expenses for each person. Thus, two teachers filing taxes jointly stand to receive extra financial relief.

How Can the Educator Expense Work for Your Tax?

Are you eligible for the Educator Expense Tax Deduction? As a teacher, it is important to check that both the minimum hours requirement and the school qualify. Once this has been established, look at what expenses over the preceding year could be eligible for deduction under this scheme.

Few Factors to Considered for Tax Deduction

The amount you can deduct from taxes depends upon several factors. Any expenses reimbursed by your school, covered by a grant, or financed through another source cannot be tax deducted.

When calculating how much can be tax deducted from taxes, several components must be taken into consideration. This includes any costs that surpass withdrawals that don’t need to be reported on a tax return, such as funds from a Coverdell Education Savings Account and state tuition programs. Interest on savings bonds also can be excluded from the deduction of higher education expenses.

Certain components play a role when figuring out what you can tax deduct from your taxes. Before the 2018 tax year, any eligible costs beyond the Educator Expense limits could be mentioned when itemizing deductions.

Tax season can be intimidating, so why not rely on a tax expert to relieve the stress? PriorTax offers an efficient and secure way of filing your taxes, guided by dedicated tax professionals. All you have to do is answer some simple questions, and they’ll take care of the rest – ensuring you get the maximum refund possible. Plus, it’s free! File with PriorTax and experience the confidence of knowing you’re in good hands.

Making Charitable Distribution and Contributions from a Traditional IRA

Posted by admin on June 22, 2023
Last modified: June 23, 2023

Making a charitable distribution and contribution from a traditional IRA is an impactful way to give back. But, it’s essential to understand the tax implications of such a decision. So, what does one need to do in order to take advantage of this donation on their Form 1040?

To make a tax Qualified Charitable Distribution (QCD) from your IRA, you are in luck – Prior Tax provides a dedicated tax profession for free that ensures that this process goes smoothly from start to finish.

Prior Tax recognizes the importance of age in determining eligibility to make a Qualified Charitable Distribution. In order to help you report the distribution correctly on your return, you will be required to enter certain details from your Form 1099-R and answer a few questions afterward. Specifically, we ask whether any or all of the distribution was transferred to an approved charitable organization.

When completing Form 1040, you will see your distribution amount on line 15a, any taxable amount ($0 is the whole contribution given to charity), and the designation QCD on line 15b.

Changes to charitable distribution tax deceptions for 2022

Taxpayers Should Consider Modifications to Donations for 2022. Individuals interested in donating in the upcoming 2022 tax year should note the modifications to charitable giving tax deductions.

For 2022 tax returns, taxpayers will not be able to claim cash donations to charities from taking the standard deduction. This is unlike last year when married filing jointly could have a $600 deduction, and single filers were able to deduct up to $300 without itemizing. Contrary to 2020 and 2021, the special rules for above-the-line deductions have yet to be extended for this year, meaning that reducing taxes through charity contributions must be itemized.

Charitable Distribution

This year, the limits for cash contributions have been adjusted. Instead of up to 100 percent of adjusted gross income as in the last two years, donors are now limited to a maximum of 60 percent.

Donations that are greater than the Adjusted Gross Income limits of the present year can be moved forward to the following five years. These carryover donations must abide by the initial proportion constraints in the following years and will be taken off once allowable offerings for the current year have been deducted.

NOTE: As a refresher, the charitable mileage rate has stayed at 14 cents per mile since last year. This figure is yet to be altered and remains the same throughout 2020.

Beware of recent trends in giving and charitable distribution. 

When considering making donations, it is important to be aware of contemporary gifting trends. Whereas contributions made directly to recognized non-profit organizations may be tax deductible, gifts given via websites such as GoFundMe pages, crowd-funding sites and Venmo/Paypal should not be assumed to qualify for deductions. To guarantee that a contribution will be eligible for a deduction, one can utilize, which contains the necessary information required.

One must be mindful that tax deductions are only available for donations made to certain charities based in Canada, Mexico, and Israel, depending on an income tax treaty with the nation. Fortunately, there is still a way to donate toward international causes while also obtaining a deduction – by donating through U.S.-based charitable organizations that work on these causes you care about.

Charitable giving through your individual retirement account

Making a philanthropic impact through your personal retirement account is possible. Utilizing a Qualified Charitable Distribution (QCD), you can transfer up to $100,000 directly from your traditional IRA to a favored charity.

For those 70.5 years or older, Qualified Charitable Distributions (QCDs) can be incredibly advantageous. When you do not need the money from an IRA but have to take your required minimum distribution, this method comes in handy. Although the total amount transferred is not tax-deductible, any portion sent directly to charity will not be taxed as part of your income for that year. Additionally, it counts as part of your annual required minimum distribution funds.

Itemize with donor-advised funds

Consider itemizing with a donor-advised fund. For those wanting to make the most of their charitable donations, setting up a donor-advised fund can be an excellent way to benefit from tax savings.

Donor-advised funds give taxpayers the ability to:

  • A charitable institution or financial firm typically manages gift funds and consists of donations from various donors. These funds are convenient to use while also being relatively affordable.
  • Taxpayers who opt for a Donor Advised Fund gain the opportunity to do something quite advantageous – bundling all of their charitable giving into one calendar year to take tax advantage of itemized tax deductions.
  • One of the advantages that donors have when using a Donor Advised Fund (DAF) is that they can transfer their money to a charity of their choice over time, even when they are not itemizing.

Need assistance claiming deductions from your charitable distribution this year? Get in touch with a dedicated PriorTax Tax Professional for free specialized help. Our dedicated tax experts can answer any questions you may need to keep up with your taxes.