Tax breaks: Education and dependents

Day traders and others preparing to file their federal taxes may wish to take advantage of available accounting tips to get the most out of their filings.

There are many tax deductions that may be available, depending on an individual's circumstances. A number of tax breaks exist for education, CPA Lisa Greene-Lewis recently told The Huffington Post, in the form of both credits and deductions, which may apply to dependents' and spouses' education costs as well.

These include the American Opportunity Tax Credit, which may be worth as much as $2,500 each of the first four years of college, as well as a refund of up to $1,000 even for those who owe no taxes. Another is the Lifetime Learning Tax Credit, which can be claimed any number of years and may provide professionals who are studying with a tax break as high as $2,000. Greene-Lewis also notes the Tuition and Fees deduction, which reduces adjusted gross income by up to $4,000 for taxpayers with eligible education expenses.

Similarly to the breaks for dependent education costs, there are tax credits for child and dependent care, allowing some to deduct between 20 and 35 percent of qualifying expenses with a limit of $3,000 per qualifying individual. Expenses for dependents who cannot take care of themselves may meet eligibility requirements.

Day traders who run their own businesses should also investigate tax breaks for equipment, furnishings and other necessary items. This may include software in addition to physical objects, although it may be best to consult an accounting firm to ensure eligibility and take advantage of all applicable tax breaks.