17

There are two types of items that reduce your income tax: deductions and tax credits. With a deduction, you subtract the deduction from your income before the tax is calculated. The benefit to you with a deduction is dependent on your tax rate. So if you are in the 22% tax bracket, a $6000 deduction would ultimately be worth $1320 to you. With a tax ...


13

A tax refund (or additional amount owed) is the difference between the tax you owe and what was already paid (via withholding or estimated quarterly payments). A tax credit reduces the amount of tax you owe regardless of how much was withheld. Altering withholding would not change the benefit from the tax credit. Say you make $35,000, are single and take ...


11

You may have to pay a penalty of $500 if both of the following apply. What the IRS really cares about is you not withholding enough, so that you send them a big check (EDIT: during tax season). https://www.irs.gov/taxtopics/tc300/tc306 The United States income tax system is a pay-as-you-go tax system If you didn't pay enough tax throughout the year, either ...


6

The fact that you got notice doesn't necessarily mean that you should have filed. What it means is that the IRS thought that you should file. They're expecting your tax return, and I suspect it is because you made a mistake. There are several different mistakes that you could have made (the list below is not complete, just what came to my mind right now): ...


6

Self-employment tax is the same as Social Security and Medicare withholdings on W2 income (commonly called FICA or payroll taxes), with W2 income employers pay half and you pay half. For those who are their own employers, they bundled the full amount of Social Security and Medicare together as self-employment tax when SECA was passed years after FICA was ...


6

Is this the kind of thing to send an amended tax return over? No. If the error didn't result in more credit, it's because you've already gotten the maximum credit/benefit available to you. The IRS does indicate that people should file an amended return if they didn't claim the correct filing status or they need to change their income, deductions, or credits....


5

This is a tax, not a deposit. So no, you will not get it back. You will be able to use your AMT credit, under certain conditions, see the instructions to form 8801. Obviously, the actual value of the credit depends on your other items of income, and you may end up never using the whole credit.


5

They're not deductible, but you can receive tax credit for these expenses. See the IRS publication 503 on the matter. The credit is up to $3K for one child or up to $6K for more than one child, provided both parents work and have earned income, and the credit doesn't exceed the actual un-reimbursed expenses/limits. Read the pub for the full details and ...


5

In broad terms, Child Benefit is a universal benefit paid to anyone earning up to £50-60,000 a year* whilst Child Tax credit is primarily means tested (for no/low incomes really). Both are payable provided the young person is under 20 (not 18) and is in full time non advanced (up to "A level" standard) education or certain types of training. Child benefit ...


5

You are misunderstanding what that quote is telling you. If a taxpayer claims federal tax credits or deductions for the energy conservation property, the investment basis for the purpose of claiming the deduction or tax credit must be reduced by the value of the energy conservation subsidy (i.e., a taxpayer may not claim a tax credit for an ...


5

It's on page 21 (page 33 of the PDF) of the Form 1 instructions:


5

I researched this same thing last year and found no satisfactory guidance from the IRS or examples of cases where this issue was challenged. One of the companies I spoke with said that any upgrades conducted at the time of solar install would qualify for the tax credit, including new 'solar-ready' HVAC and seemingly unrelated items like additional ...


4

Your "relatively high" income will likely keep you from getting a subsidy. To be sure, there's a calculator that will help you. For most tax related issues, it's the year's total that matters. If you made $90K in 6 months or even two weeks, that's income in 2015.


4

You have two choices depending on your exact situation you might use either: the tax-credit or the flexible spending account (FSA). You can't use both unless more than one child in involved. The first thing to determine is if your company ha the flexible spending account for dependent care. If they do and you want to use it you either signup during open ...


4

Extended for five years. I wrote an article Over The Cliff and Back, in which I highlight the 2013 changes agreed to in Washington New Years evening. It remains at $1000 per child, but same as in prior years, phases out based on income. The details of H.R. 8, the American Taxpayer Relief Act (ATRA) of 2012, runs a full 157 pages. As a PDF, it's friendly to ...


4

The big problem will be that the forms have to include the Vehicle Identification Number (VIN). That implies that there is the possibility that one of the forms might be rejected. There is also the problem that the form may be flagged because the amount claimed doesn't match the amount expected based on the make and model. The best approach is for one ...


4

Since you don't have passive income - you cannot use passive tax credit. If you expect to sell the property within the next 10 years, you can accumulate the credit. Otherwise - it will be lost and you won't be able to take advantage of it. That is the exact scenario where taking a deduction for foreign tax credit can be helpful. You can deduct it now (i.e.: ...


3

The rule of thumb (and that is also what the IRS say in the link Chris posted in the comment) is that if the institution is eligible for FAFSA - the tuition qualifies for the credits. The quote from the IRS publication: Eligible educational institution. An eligible educational institution is any college, university, vocational school, or other ...


3

You don't necessarily use this to approximate expenses. You use it to determine the maximum tax credit you could receive for work-related expenses under this part of the tax code. According to the examples listed on the page you linked (look immediately below the passage you quoted), you first look up the maximum employment amount by year. For 2012, it was $...


3

No, you can not claim any sort of tax benefit. The main problem is that your parent is not living with you, though even if they were, they would also have to be dependent on you. I cannot find a good definition of 'dependant', but from what I can find, they must have only a trivial amount of income and must rely on you for at least 50% of their living ...


3

In the united states qualified institutions of higher education should give the student a 1098-t. This form breaks down all money received/billed and for tuition and scholarships. It would not include items such as books and room and board. The 1098 would constitute proof of attendance and proof of expenses. If a 529 plan was used to pay for part or all of ...


3

I had wondered this ever since late 2017, when the Federal tax reform law passed. Unfortunately, the budget just passed in New York state includes provisions that restore the child tax credit to its previous levels (i.e., before Federal tax reform). Here is a link to a report that analyzes the entire budget, including this specific provision (look for "...


3

Self-employment tax is actually a completely separate tax from income tax. It is only included on the income tax form for convenience.


3

Suppose first that you have no self-employment income and so your taxable income is entirely due to salary, wages, interest, dividends, capital gains etc.. Lines 48-54 are tax credits that reduce the income tax (plus AMT if any) that you owe on your income, and you cannot use the total credits of Line 55 to reduce the Social Security tax and Medicare tax on ...


3

Your eligibility for tax credit has nothing to do with how much you have prepaid or withheld. There are two completely separate ledgers or "tabs" rolling here. Ledger #1 is your prepayment ledger: the money you have prepaid toward your taxes, in the form of withholding or quarterly payments. The total of these is the prepayments you have deposited with ...


3

On the new postcard-sized 2018 Form 1040, there is a box that looks like this: The 2018 Form 1040 instructions say this: If you have more than four dependents, check the box on the right side of page 1 of Form 1040 (just above the Dependents section) and include a statement showing the information required in columns (1) through (4). It seems that, if ...


2

In terms of the differences between the Dependent Care FSA and the Childcare Tax Credit, the general advice is that the FSA is the better choice where it is available, because it allows you to avoid paying FICA and Social Security taxes on the income excluded in this manner. Of course, if you are unable to use the FSA because it is not available through ...


2

Source Mr D receives a dividend of £100 cash from his Limited Company. The way tax credits work means that this actually represents only 90% of the tax charge so to work out the taxable income it needs to be ‘grossed up’ to 100%. You do this by taking the 100, dividing it by 90 then multiplying it by 100, giving £111.11. For the purposes of a tax return ...


2

You're a cash basis taxpayer, so when you pay something is when you claim it - not when you're billed. So, yes, you should be able to claim this for 2015. The IRS uses the language "paid" specifically in the Tuition and Fees Deduction explanation: Generally, the deduction is allowed for qualified education expenses paid in 2015 in connection with ...


2

In a situation like this the usual procedure is to file an extension instead of your tax return. When you get the Norwegian data then you file your real return. Note that the extension is only for the purposes of filing, not for paying--do your best to figure what you're actually going to owe and send that along with the extension request. (However, if ...


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