Overpaying taxes does not always mean you made a calculation mistake.
Sometimes it means you never checked a credit or deduction that matched something that happened in your life.
A child was born.
You paid for childcare.
You went back to school.
You became self-employed.
You contributed to retirement.
You bought health insurance through the Marketplace.
You made certain home improvements.
Each of those events can create a reason to check the tax rules again.
- Credits vs. deductions
- Family and dependent credits
- Work and income credits
- Education credits
- Retirement-related tax benefits
- Health-related tax items
- Home and energy tax items
- Self-employment deductions
- Other deductions worth checking
- How to review a past return
- Where to get tax help
- Frequently asked questions
First: Know Whether You Are Looking for a Credit or Deduction
A tax credit and a tax deduction are not the same thing.
Tax credit
A credit generally reduces tax directly.
Some credits are refundable, some are partially refundable, and others are nonrefundable.
Tax deduction
A deduction generally reduces the amount of income subject to tax.
Some deductions are available even if you use the standard deduction. Others require itemizing.
The IRS maintains a current overview here:
IRS — Credits and Deductions for Individuals
Family and Dependent Tax Credits
Child Tax Credit
The Child Tax Credit may apply to taxpayers with qualifying children.
Rules involving age, relationship, residency, Social Security numbers, income, refundability, and credit amount can change.
Use the IRS page for the tax year involved:
Child and Dependent Care Credit
This credit may apply when qualifying care expenses allow you and, when applicable, your spouse to work or look for work.
Do not assume only traditional daycare counts.
Check current IRS rules for:
- Who is a qualifying person
- Which expenses qualify
- Provider information requirements
- Earned-income requirements
- Interaction with dependent-care benefits from an employer
Adoption Credit
Qualifying adoption expenses may create eligibility for the Adoption Credit.
Rules involving refundability, carryforwards, timing, income, and qualifying expenses can change.
Work and Income Tax Credits
Earned Income Tax Credit
The Earned Income Tax Credit can apply to qualifying workers with or without children.
Eligibility changes by tax year and depends on factors such as:
- Earned income
- Adjusted gross income
- Investment income
- Filing status
- Qualifying children
- Age and residency rules
Do not assume last year's eligibility answer still applies.
Premium Tax Credit
If you or your family purchased qualifying health coverage through the Health Insurance Marketplace, the Premium Tax Credit may need to be reviewed.
If advance payments of the credit were used during the year, the tax return may also need to reconcile those payments with the final household information for the year.
Education Credits
American Opportunity Tax Credit
The American Opportunity Tax Credit may apply to qualifying higher-education expenses during eligible years of post-secondary education.
Check IRS rules for:
- Eligible student requirements
- Qualified institutions
- Qualified expenses
- Income limitations
- Dependency rules
- Coordination with scholarships and education savings accounts
Lifetime Learning Credit
The Lifetime Learning Credit covers a different range of education situations from the American Opportunity Tax Credit.
Do not assume you can claim both credits for the same student and the same expenses.
Use the IRS comparison:
Retirement-Related Tax Benefits
Saver's Credit
Some taxpayers who contribute to eligible retirement accounts may qualify for the Retirement Savings Contributions Credit, commonly called the Saver's Credit.
Income limits and other requirements change over time.
IRA deduction
Traditional IRA contributions may be deductible depending on income, filing status, and whether the taxpayer or spouse is covered by a workplace retirement plan.
Do not assume that making an IRA contribution automatically means it is fully deductible.
Health-Related Tax Items
Medical and dental expenses
Some unreimbursed medical and dental expenses may be deductible when a taxpayer itemizes and meets the current IRS threshold and other requirements.
Potential expenses can include certain:
- Medical care
- Dental care
- Prescription costs
- Insurance premiums
- Medical equipment
- Transportation for qualifying medical care
Not every health-related expense qualifies.
Home and Energy Tax Items
Home-related credits have changed repeatedly in recent years, so this is an area where old articles can become misleading quickly.
Energy-related credits
Certain qualifying residential energy improvements or clean-energy property may create federal tax-credit eligibility.
The exact credit, percentage, annual limits, product requirements, installation requirements, and expiration rules depend on the tax year and property involved.
Use the IRS current home-energy guidance:
Clean vehicle credits
Do not rely on an old article to determine whether a vehicle purchase qualifies for a federal clean-vehicle credit.
Rules can depend on:
- Purchase date
- Vehicle
- Buyer income
- Sale price
- New versus previously owned status
- Current federal law
Tax Deductions to Check If You Are Self-Employed
Self-employment creates a different set of tax questions from ordinary wage employment.
Business use of your home
A qualifying home office may create a deduction when the IRS business-use rules are met.
Do not claim it simply because you occasionally work from home.
Business use of a vehicle
Self-employed taxpayers may be able to deduct qualifying business vehicle expenses.
The IRS updates mileage rates and documentation rules, so use the rate for the year involved.
Self-employed health insurance
Qualifying self-employed taxpayers may be able to deduct certain health-insurance costs.
Eligibility can depend on business income and access to other coverage.
Use current IRS instructions for the tax year.
Deductible part of self-employment tax
The tax treatment of self-employment tax includes an adjustment that taxpayers should make sure is correctly reflected on the return.
If you are new to self-employment, this is one reason to review the return carefully rather than treating freelance income like ordinary wages.
Other Deductions Worth Checking
Student loan interest
Qualifying student loan interest may be deductible subject to current income, filing-status, dependency, and loan requirements.
Educator expenses
Eligible educators may be able to deduct qualifying unreimbursed classroom expenses.
The annual limit can change, so use the current IRS amount rather than a figure from a prior year.
Charitable contributions
Charitable contribution rules depend on the tax year, whether you itemize, the type and value of the donation, the organization, and the documentation you have.
Large or non-cash donations can require additional records or forms.
Check New Tax-Law Changes for the Year You Are Filing
Even if you knew the tax rules last year, do not assume they are unchanged.
New deductions, modified thresholds, expanded provisions, or expiring provisions can change what is worth checking.
- Confirm the tax year.
- Open the IRS credits and deductions page.
- Look specifically for “what's new” guidance for that filing season.
- Check any life event that changed since your previous return.
IRS — Current Credits and Deductions
How to Review a Past Return for Something You Missed
If you think an older return is wrong, do not immediately file an amendment.
First determine whether there is actually something to correct.
Step 1: Get the old return
Use your saved return or obtain IRS records if needed.
Step 2: Look at what changed that year
Ask whether that year included:
- A new child
- Childcare expenses
- Education expenses
- A job loss or large income change
- Self-employment
- Retirement contributions
- Marketplace health insurance
- Major medical costs
- Home energy improvements
- A qualifying vehicle purchase
- Large charitable contributions
Step 3: Use that year's rules
This is critical.
Step 4: Determine whether an amendment is appropriate
The IRS uses Form 1040-X to correct certain previously filed individual returns.
Examples can include changes to:
- Income
- Credits
- Deductions
- Dependents
- Filing status
- Tax liability
Refund time limits matter
Federal refund claims generally have filing time limits.
The IRS generally uses a three-year-from-filing or two-year-from-payment rule, whichever is later, with exceptions and additional rules that can apply.
Always check the exact deadline for the return involved.
IRS — Time You Can Claim a Credit or Refund
When Tax Help Is Worth Using
Consider professional or qualified tax assistance when the situation includes:
- Multiple years that may need correction
- Self-employment or business activity
- Complex education-credit coordination
- Divorce or complicated dependency issues
- Large non-cash charitable contributions
- Foreign income or accounts
- Complex investment activity
- Estate or inheritance issues
- A large proposed tax change
- Uncertainty about whether an amendment is correct
Free IRS-sponsored help may be available
The IRS sponsors free tax-preparation programs for qualifying taxpayers.
- VITA: Volunteer Income Tax Assistance
- TCE: Tax Counseling for the Elderly
IRS — Free Tax Return Preparation
Frequently Asked Questions
Should I use the dollar amounts in an older tax article?
No. Use the IRS rules for the exact tax year you are filing. Credit amounts, deduction limits, income phaseouts, standard deductions, and other provisions can change.
Does taking the standard deduction mean I cannot claim any other deductions?
No. Some adjustments and deductions can be available even when you take the standard deduction. Other deductions require itemizing. Check the specific IRS rule.
Can tax software find every credit automatically?
Not necessarily. Tax software relies on the information entered. If a relevant life event, expense, or document is not entered correctly, the software may not identify the tax item that could apply.
Can I claim both education credits for the same student?
Generally, you cannot use the same qualifying expenses to claim both education credits for the same student in the same tax year. Review the IRS coordination rules before filing.
Can self-employed workers qualify for the EITC?
Potentially. Net earnings from self-employment can be relevant to EITC eligibility, but all current EITC requirements still apply. Use the IRS EITC guidance for the tax year involved.
How far back can I amend a return?
There is no safe blanket answer for every situation. Federal refund claims are generally subject to the IRS three-year or two-year timing rules, with exceptions. Check the exact date and circumstances of the return before filing an amendment.
Does claiming a legitimate deduction automatically trigger an audit?
No. You should claim tax benefits you legitimately qualify for and maintain the documentation the IRS requires. Do not avoid a valid tax item solely because you are worried that claiming it is unusual.
Should I amend a return for a very small missed amount?
First verify that the return is actually incorrect, that the amendment is permitted, and that you have the necessary documentation. Then weigh the administrative effort against the potential tax difference.
Should I check state tax credits too?
Yes. State tax systems can offer credits and deductions that are separate from federal tax rules. Use your state's official tax or revenue agency for current information.
