The IRS expects that 75 percent of all returns will be entitled to a refund, so if you haven't started preparing your taxes yet, do it There's no reason to wait for April 15 to roll around to get that money back from Uncle Sam. And remember If you do not file your return by the due date, you may have to pay penalties and interest. Even if you can't meet the deadline, you can file for an extension, which will give you until October 15 to file your tax returns.

Here are some updates before you start to prepare

New for tax year , the IRS is providing taxpayers whose incomes are $57,000 or less with "Free File",  available through IRS.gov, where a number of tax software companies make their products available for free. Additionally, some states are offering similar options. Electronic e-filing is available to all taxpayers, regardless of income.

Mailing your return

If you are filing a paper return, you may be mailing it to a different address this year because the IRS has changed the filing location for several areas. See Where To File for a list of IRS addresses.

Exemption amount

$3800 from $3,700 in 2011

Standard deduction

For married couples filing a joint return, the standard deduction is $11,900 for . For single individuals and married couples filing separate returns, it is $5,950 and for heads of household it increases by $200 to $8,700 for .

Tax-bracket thresholds increase for each filing status.

For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $70,700, up from $69,000 in 2011.

Estate and gift tax

The exclusion amount for is $5,120,000. The exclusion for gifts to a spouse who is not a citizen of the United States increases to $139,000 for .

Itemized deductions and personal exemptions

The itemized deduction limitation and personal exemption phase-out rules were repealed for 2011 and , which means taxpayers can deduct the full amount of their itemized deductions and personal exemptions in . These limitations ($250,000 for individuals and $300,000 for joint filers) will go back into effect for tax year 2013

Get the Credit(s) You Deserve

Tax credits are the best tax deal going, because they reduce your taxes dollar for dollar, instead of being calculated based on your tax bracket.

The Earned Income Tax Credit (EITC)

is a refundable credit for low- and moderate- income workers and working families. The income limit for the EITC is under $50,270 for joint filers and under $45,060 for singles and the maximum credit is $5,891. The credit varies by family size, filing status and other factors, with the maximum credit going to joint filers with three or more qualifying children. Use Schedule 8812 to figure your additional child tax credit for . (Details are in IRS Publication 596.)

The Child Tax Credit

is up to $1,000 for each qualifying child who was under the age of 17 at the end of . This credit can be claimed in addition to the credit for child and dependent care expenses, but phases out for married couples that earn more than $110,000 and single filers who earn more than $75,000. In an IRS-esque move, taxpayers should use Schedule 8812 (instead of Form 8812) to figure the additional child tax credit. (Details are in IRS Publication 972.)

The Child and Dependent Care Credit

is available if you pay someone to care for a dependent under age 13, so that you can work or look for a job. The credit is 20 to 35 percent of your child-care expenses up to $6,000 the size of your credit depends on your income. This credit will be reduced significantly next year. (Details are in IRS Publication 503.)

The Retirement Savings Contributions Credit

is designed to help low- and moderate-income workers save for retirement. Individuals with incomes of up to $28,750, head of households with $43,125 and married couples with joint incomes of up to $57,500 may qualify for a credit of up to $1,000 per person. (Details are in Form 8880)

Energy and Appliance Tax Credit

If you made any energy-efficiency improvements to your home in , you may be eligible for a tax credit of 10 percent for the cost, up to a maximum of $500. Approved improvements include new windows, insulation, high efficiency furnaces, water heaters and air conditioning, among many. Be sure to keep your receipts and manufacturer certification. (See which Energy Star items qualify for the tax deduction and use IRS Form 5695)

The Adoption Tax Credit

in has reverted to being nonrefundable, with a maximum amount (dollar limitation) of $12,650 per child from $13,360 in 2011. The income limit on the adoption credit is based on your modified adjusted gross income (MAGI). For tax year , the MAGI phase out begins at $189,710 and ends at $229,710. (IRS Topic 607)

College Costs

The American Opportunity Tax Credit

For tax year , students can claim a $2,500 "higher education tax credit" for the first four years of college. The credit is based on 100 percent of the first $2,000 of tuition and related expenses, including books, paid during the tax year, plus 25 percent of the next $2,000 of tuition and related expenses paid during the tax year (subject to income phase-outs starting at $80,000 for singles and $160,000 for joint filers).

Lifetime learning credit

The modified adjusted gross income threshold at which the lifetime learning credit begins to phase out is $104,000 for joint filers, up from $102,000, and $52,000 for singles and heads of household, up from $51,000.

Tuition and fee deductions Every family can deduct up to $4,000 of college tuition and fees in , subject to income limitations. If your modified AGI is between $65,001 and $80,000 for singles or between $130,001 and $160,000 for joint filers, you are entitled to a reduced deduction of up to $2,000. (IRS Publication 970)

Student loan interest deduction

The $2,500 maximum deduction for interest paid on student loans begins to phase out for a married taxpayers filing a joint returns at $125,000 and phases out completely at $155,000, an increase of $5,000 from the phase out limits for tax year 2011. For single taxpayers, the phase out ranges remain at the 2011 levels.

Itemized Deductions

Nearly two out of three taxpayers take the standard deduction rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes. Some of those folks are leaving money on the table. If your deductible expenses exceed the standard deduction limits above, be sure you itemize and grab these write-offs.

Miscellaneous deductions

These are deductible if they total more than 2 percent of your adjusted gross income. They include tax-preparation fees, job-hunting expenses, business car expenses, and professional dues.

Sales tax

You can deduct sales tax paid in if the amount was greater than the state and local income taxes you paid. In other words, you get to choose Write off your sales taxes or write off your income taxes. If you didn't keep your sales-tax receipts, use the IRS's sales tax deduction estimator. Even if you claim the sales tax amount from the IRS tables, you can add in tax paid on vehicles or boats purchased during the year, except to the extent the sales tax rate on them is more than the general sales tax rate. If you live in a state with a high income tax, like California or New York, you will probably be better off claiming your state and local income taxes rather than sales taxes. If you live in a state with no income tax, like Florida, Texas, or Washington, be sure to take the sales tax deduction when you itemize.

Medical expenses

This one is hard to claim, because the bar is so high to qualify. You can only deduct the portion of your medical expenses that exceed 7.5 percent of your adjusted gross income.

Mileage

Deducting miles driven for work or other purposes can be a huge tax break and save you significant money. The rate for business use of your car remains 55.5 cents a mile; medical and moving is 23 cents per mile; and charitable use is 14 cents per mile

Mortgage insurance deduction

Borrowers with AGI's up to $100,000 may be able to treat qualified mortgage insurance as home mortgage interest, which means that 100 percent of 2011 premiums may be deductible. The insurance contract had to be issued after 2006 and deductions are phased out in 10 percent increments for homeowners with AGI's between $100,001 and $109,000. (IRS Publication 936)

Classroom deduction for teachers

K-12 educators who work at least 900 hours during the school year can claim an above-the-line deduction of up to $250 ($500 if married filing joint and both spouses are educators, but not more than $250 each) for any reimbursed expenses (books, supplies, computer equipment (including related software and services), other equipment, and supplementary materials) used in the classroom. (IRS Topic 458)

IRA/Roth Conversion

When you contribute to an individual retirement account, you help fund a future goal while lowering your current tax bill. In other words, socking cash in an IRA is like saving with help from your Uncle Sam.

You have until tax filing to contribute up the lesser of your taxable compensation for the year or $5,000 to a IRA ($6,000 if you are 50 or older). If you are self-employed, have a Keogh or SEP-IRA, and have filed for an extension to October 15, you can wait until then to put money into those accounts.

Even if you're covered by a retirement plan at work, you can deduct some or all of your IRA contribution. The  IRA limits for modified AGI as follows

More than $92,000 but less than $112,000

for a married couple filing a joint return or a qualifying widow(er)

More than $58,000 but less than $68,000

for a single individual or head of household, or

Less than $10,000

for a married individual filing a separate return.

For married couples filing a joint return,

in which the spouse who makes the IRA contribution is not an active participant in an employer-sponsored retirement plan but the other spouse is a participant, the deduction is phased out if the couple's income is between $173,000 and $183,000, up from $169,000 and $179,000 in .

Charitable donations from IRA's Taxpayers aged 70 1/2 or older can make direct tax-free transfers of up to $100,000 from IRAs to qualified charities. The transfers can satisfy minimum required distributions without increasing adjusted gross income.

Roth IRAs

Roth IRAs allow taxpayers to invest money for future retirement needs.

Unlike a traditional IRA, there is no current tax deduction available for contributions to a Roth and all funds within the Roth IRA compound tax-free and all withdrawals from the account are also tax-free.

To qualify to contribute to a Roth,

your income must fall within the Modified Adjusted Gross Income (MAGI) limits. The limit for is $173,000 to $183,000 for married couples filing jointly, up from $169,000 to $179,000. For single taxpayers, the income phase-out range is $110,000 to $125,000, up from $107,000 to $122,000 in 2011.

Roth conversion

If you converted or rolled over an amount to a Roth IRA in 2010 and did not elect to report the taxable amount on your 2010 return, you generally must report half of it on your 2011 return and the rest on your return. (See Publication 575 for details.)

10 Homeowner Tax Breaks

“If you have taken out a homeowner’s loan, consider these deductions as Uncle Sam’s gift to you. These tax breaks will surely alleviate the financial burden of many taxpayers, especially those who are paying their mortgage,” says John Gregory, founder of 1040Return.com, a Baltimore-based tax-prep company.

Some of the most significant tax breaks that only homeowners can claim are fairly well-known, such as the MID, but here are some others:

1. Points on home mortgage and refinancing:

If you bought a home in 2014 with a mortgage, then in addition to the mortgage interest (which may not be a lot if you bought late in the calendar year), you can probably write off the points (both origination and discount points) on your tax return, says Jackie Perlman, principal tax research analyst at H&R Block (HRB). One point is equal to 1% of the principal loan amount. That’s because the IRS considers points to be prepaid interest. The challenge is whether you’re eligible to deduct the points all at once, or whether you have to spread the costs out over the life of the loan. Generally, if you bought your first home or got a loan on that first home, you can take the deduction all at once, the IRS says. For a second home, and often for a refinance on a first home, the IRS says you most likely have to spread it out. “You have to meet all the criteria in order to deduct them up front, otherwise you have to amortize them over the life of the loan,” she said. A good place to start, she says, is the IRS Tax Information for Homeowners guide.

2. Interest on home-improvement loan:

The IRS considers the interest on a home-improvement loan fully deductible, up to $100,000 in debt. In addition, interest paid on a home equity line of credit (HELOC) is also tax-deductible. However, as Greg McBride, chief financial analyst with Bankrate.com, notes, any portion of a home loan that is over 100% loan-to-value (meaning the loan is worth more than the value of the property) isn’t deductible.

3. Property tax:

Property taxes are almost always tax-deductible, but some things on your settlement document that might look like taxes really aren’t, says McBride. You can’t write off your attorney and appraisal fees, title insurance and credit report costs either, McBride notes. Transfer taxes however can be written off, says Gregory.

4. Energy-efficiency tax credit:

If you made efforts in 2014 to make your home more energy efficient by installing equipment like storm doors, energy efficient windows, insulation, air-conditioning and heating systems, the IRS wants to give you a tax credit of $500, though only $200 of that can be used for the windows. The credit however is set to expire on Dec. 31, 2016.

5. Renewable-energy tax credit:

If you’ve installed equipment that uses renewable sources of energy, such as the sun and wind, to help power your home, you may be eligible for the Renewable Energy Efficiency Property Credit. You are eligible for this tax credit up to a whopping 30% of the cost of the equipment, installation included, so long as the equipment is placed in service by the end of December 2016. About 600,000 American homeowners have added residential solar equipment since 2010, according to the Solar Energy Industries Association.

6. Ground rent:

There are rare situations in the U.S. for homeowners where the original owner still owns the land under your house after you’ve bought it, and you own the above ground property and “rent” the ground from the owner. The “ground rent” option reduces the cost of the home since you’re not buying the land. The IRS lets you get a break for this situation and thus “ground rent” amounts can be deducted if you have been paying the rent monthly or annually, so long as the lease is for more than 15 years. However, if you’re making a payment to capitalize the ground rent, to buy out the lessor’s interest to get out from under it every year, that payment isn’t deductible, the IRS says.

7. Income and interest on reverse mortgages:

The IRS considers reverse mortgages as a loan advance not income, so the amount you receive isn't taxable. But the interest accrued on a reverse mortgage isn't deductible until the loan is paid off, so you can’t take a deduction each year for the interest as you might with the traditional mortgage interest you pay, says Gregory.

8. Private mortgage insurance:

You may be eligible to claim the deduction for private mortgage insurance (PMI) or mortgage insurance premiums on your tax return, though the 2014 tax year is the last year the deduction can be taken. Keep in mind that the deduction for qualified mortgage insurance premiums is reduced if your adjusted gross income (AGI) is over $100,000, and if it’s over $109,000 you can’t take the deduction at all. And you won’t get around that limitation if you’re married and filing separately, as the deduction begins to be reduced at $50,000 in AGI and disappears at $54,500.

9. Home expenses and improvement:

If you make improvements to your property, you cannot write off the cost of home improvement, such as the materials and the labor. (Though you can write off the interest of course if you took out a home loan to pay Joe Contractor and purchase the materials.) However, when you sell your home, you can add the cost into the asking price of your property, which should diminish the capital gain when you sell your home, says Gregory of 1040Return.com.

10. Buying a home:

The IRS allows first-time home buyers to withdraw up to $10,000 from their traditional IRA (and even Roth IRAs) penalty-free to help with the purchase of the home. Your spouse or even a parent, child, or grandchild can kick in another $10,000 from their IRA accounts, for a total of up to $20,000. You can also borrow half of your 401(k) balance up to $50,000 for the purchase of a home.

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