|
|
Are You Eligible For Any Of These Tax Credits?
Richard A. Chapo
Taxpayers should consider claiming tax credits for which they might be eligible when completing their federal income tax returns. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable - taxes could be reduced to the point that a taxpayer would receive a refund rather than owing any taxes. Below are some of the credits taxpayers could be eligible to claim:
Earned Income Tax Credit
This is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the EITC. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.
Child and Dependent Care Credit
This is for expenses paid for the care of children under age 13, or for a disabled spouse or dependent, to enable the taxpayer to work. There is a limit to the amount of qualifying expenses. The credit is a percentage of those qualifying expenses.
Adoption Credit
Adoptive parents can take a tax credit of up to $10,390 for qualifying expenses paid to adopt an eligible child. A credit of up to $10,390 may be allowed for the adoption of a child with special needs even if you do not have any qualifying expenses. For more information, see Pub. 968, Tax Benefits for Adoption.
Credit for the Elderly and Disabled
This credit is available to individuals who are either age 65 or older or are under age 65 and retired on permanent and total disability, and who are citizens or residents. There are income limitations. For more information, see Pub.524, Credit for the Elderly or the Disabled.
Education Credits
There are two credits available, the Hope Credit and the Lifetime Learning Credit, for people who pay higher education costs. The Hope Credit is for the payment of the first two years of tuition and related expenses for an eligible student for whom the taxpayer claims an exemption on the tax return. The Lifetime Learning Credit is available for all post-secondary education for an unlimited number of years. A taxpayer cannot claim both credits for the same student in one year. For more information, see Publication 970, Tax Benefits for Education.
Retirement Savings Contribution Credit
Eligible individuals may be able to claim a credit for a percentage of their qualified retirement savings contributions, such as contributions to a traditional or Roth IRA or salary reduction contributions to a SEP or SIMPLE plan. To be eligible, you must be at least age 18 at the end of the year and not a student or an individual for whom someone else claims a personal exemption. Also, your adjusted gross income (AGI) must be below a certain amount. For more information, see chapter four in Publication 590, Individual Retirement Arrangements (IRAs).
|
Tax Credit Related News
Credit Suisse to sell Winterthur (CNN.com)ZURICH, Switzerland (Reuters) -- Credit Suisse on Wednesday said it has agreed to sell its Winterthur insurance arm to French group AXA for 13.4 billion Swiss francs ($10.87 billion), including 1.1 billion francs to repay inter-company debt.
Tax credit saga continues (KableNET)David Laws, Liberal Democrat MP for Yeovil, raised the issue in a parliamentary debate on 12 June 2006. "May I encourage the secretary of state to ask the chancellor to consider that as tax credits are no more than means tested benefits, it would make far more sense to administer the credits from his department than from the Treasury ," Laws asked DWP secretary John Hutton.
Tax credit boost would aid veterans (Cheboygan Daily Tribune)CHEBOYGAN - New legislation that would give veterans an income tax credit was recently introduced by State Sen. Jason Allen, R-Traverse City. The legislation would increase income tax credits for disabled service persons and veterans, or their widow or widower, said Allen spokesman Jamie Callahan.
|
Related Articles
- Labor Employment Taxes
If you have employees, then you are responsible for payroll taxes. The term payroll taxes lumps all the different forms of employment taxes into one category known as "payroll tax". In reality, payroll...
- How To Check The Status Of Your Tax Refund Online
So, you were pleasantly surprised to learn that you are getting a refund on your taxes. Congratulations! The question for most taxpayers expecting a return is, "Where is my refund?"Check Your Refund Status...
- 1-Income Tax Refunds
Those are the words that every taxpayer would love to hear, yes, youre receiving an income tax refund. For many individual taxpayers those refunds can be obtained through Earned Income credit, a real...
- 5 Reasons Why You Should NOT Get A Big Tax Refund
I will never forget the day one of my tax clients came to pick up his personal income tax return. "Hows it look?" he asked."Well," I said, "Youre getting a refund.""Great! How much?""Oh, its a big one,"...
- The Internal Revenue Service
Do you ever wonder, how a country that revolted because of the unfair taxation of tea, came to be under the tight control of the Internal Revenue System? It seems kind of ironic, doesnt it, that the very...
- A 23 Federal Sales Tax But Wait
We are so used to having our federal income tax, social securityand medicare taxes withheld from our paycheck, most of us dontrealize there are efforts to change this dramatically. There is a group going...
| | |
