Five Ways to Maximize Your Tax Refund

Now is the time to start thinking about your taxes because your refund could help you get through these tough economic times.

"Good Morning America" financial contributor and president of Ariel Investments Mellody Hobson shares five ways to maximize your tax refund this year.

New Homeowner Deduction

As part of the housing bailout bill passed by Congress, homeowners who do not itemize their taxes can claim a property tax deduction of $500 or $1,000 if you are married and filing jointly, in addition to the standard deduction.

VIDEO: Mellody Hobson on GMA.

And if you were a first-time home buyer in 2008, you may be eligible for a tax credit of up to $7,500 or 10 percent of the purchase price, whichever is less.

There is an important catch to this credit though. You have to pay it back in the next 15 years, in equal amounts each year, which makes it a bit more like a loan than a credit. So if you took the maximum credit of $7,500, you would need to pay back $500 per year for the next 15 years. But it still helps you get some much needed cash now when the economy is so bad, and you can pay it back a little at a time as things get better.

Unemployed Can Deduct Many Job Hunting Expenses

If you were laid off in the last year, most of the expenses incurred while looking for a job can be deducted from your taxes, so carefully track these expenses. For example, any money you spent on creating and mailing your resume is deductible. You can also deduct expenditures for career coaches and headhunters. You can even deduct long distance or cell phone charges related to the job search, as well as travel expenses incurred for interviews, including mileage.

Commonly Missed Deductions

Teacher Book Credit: Teachers who paid for books or other classroom supplies can deduct up to $250.

College Tuition Credit: Parents who paid their children's college tuition in 2008 can deduct up to $4,000.

Clean Fuel Credit: If you bought a hybrid car or truck you're eligible for a conservation tax credit of between $250 and $1,000. Depending on the make of the car you could get a fuel economy credit of between $400 and $2,400.

Prepaid Refund Cards From Tax Preparation Companies

Many tax preparation services have introduced prepaid tax refund debit cards, where your tax refund amount is loaded on a debit card. These cards are targeted at consumers who don't have a bank account -- approximately 28 million Americans -- and the 45 million Americans who pay high bank fees because they don't maintain the minimum balance.

However, these refund cards are a better alternative to high-cost refund anticipation loans, which could carry annual interest rates of more than 187 percent.

It takes many cards about two weeks to arrive, which is about the same amount of time it would take the typical e-filer to get his or her return.

Many -- not all -- of the cards also have hidden fees, such as a one-time fee for the card, transaction fees, inactivity fees and added ATM fees.

If you have the ability to e-file or do not need your tax return right away and you have a bank account, I'd suggest you do not use these prepaid refund cards because of all the fees.

The H&R Block prepaid debit card is called the Emerald Card. There's no wait to receive the card, but it can't be activated until you actually get your refund. The fees associated with the card are:

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