Get the most back from your tax return



Posted on March 23, 2011 at 5:40 PM

Updated Wednesday, Mar 23 at 5:46 PM

If you made energy efficiency upgrades to your home last year, you may be getting some money back on your taxes. But if you bought that home in 2008, you may be paying more.

When Mike and Ela Arman started planning their new home, they wanted to go green.

"We used a high efficiency water heater, high efficiency heat pump, double-paned, argon-filled windows that are insulated," said Mike.

Not only will they be saving energy, they'll be saving money on their taxes.

"The home energy efficiency credit is an up to $1,500 credit you can get by making improvements to your house that increase its efficiency," Elaine Smith with H&R Block said.

That credit expired at the end of last year. If you qualify, you need to claim it on this year's return or kiss it goodbye.

Another one that expires this year is the Making Work Pay credit. It's $400 for single people and $800 for married couples filing jointly – just for having a job.

"It's a credit for people who worked, even if they worked a little. It was the most commonly missed credits last year," said Smith.

Here's some bad news. If you took the first-time homebuyer credit in 2008, the IRS says it's time to start paying it back.

"The 2008 first-time homebuyer credit acted more like an interest free loan. So, if you took the full credit of $7,500 for that year, you'll have to start repaying $500 a year," IRS Spokesperson Peggy Riley said.

Other changes might work out in your favor: an inflation adjustment will increase the standard deduction and the income tax credit you'll receive. There's also credit for educators who buy supplies and a tuition and fees deduction to help out students in college and their parents.

To make sure you're getting all your deductions, the IRS suggests e-filing. You'll also get your refund sooner.