RefundtalkThe term “exemption” is often one that inspires bewilderment and perplexity among the most intelligent individuals. When filing your personal tax return or even filling out a W-4 for your employer, you may not be sure what exactly an exemption is – and you certainly do not want to ask and look like an idiot. So,…
Category Archives: Tax Credits
An In-Depth Look At The Tuition And Fees Deduction
There are several ways in which education expenses can be used to decrease your tax burden. In addition to the Hope Credit, the Lifetime Learning Credit, and the student loan interest deduction, there is also a deduction available for tuition and fees related to educational expenses. Although this deduction can not be taken if you…
The Difference Between Deductions And Credits
When filing your personal income tax return, there are primarily two ways to reduce your tax liability: deductions and credits. Although any way to pay Uncle Sam less is greatly appreciated, there are advantages to utilizing different techniques in reducing the amount you pay in taxes. Deductions and credits are actually considerably different creatures and…
Most Commonly Missed Deductions And Credits
In all the complexity of tax preparation, it is easy to miss a deduction or credit. This is a particular advantage to utilizing a professional tax service because they ask all the questions you may otherwise overlook. Here is a look at some of the most commonly missed deductions and credits. Tuition and Fees Deduction…
Tax Credits vs Tax Deductions
Tax credits and tax deductions are two different types of tax breaks. Both can lower your tax bill, but they work in different ways. What is a tax deduction? A tax deduction is an expense that you can subtract from your yearly income. Deductions are taken before you calculate how much of your income is taxable. That means you should subtract any tax…
What are the Hope credit and the Lifetime Learning credit?
The Hope credit (renamed the American Opportunity credit) and the Lifetime Learning credit are tax credits for taxpayers who pay certain higher education costs. These credits depend on the amount of qualified tuition and related expenses you paid in a given year, as well as the level of your modified adjusted gross income (MAGI). The…
Tax Benefits for Members of the Military
Military members benefit from a variety of special tax benefits. These include certain nontaxable allowances, non-taxable combat pay, and a variety of other special tax provisions. Here is a rundown on the most prominent of the tax benefits. Service Member Residence or Domicile A frequent question by service members is “What is my state of…
Earned Income Tax Credit And Child Tax Credit – What Changed
Are you planning on claiming the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC) on your federal tax return this year? If yes, then you should know some things have changed since last year. Child Tax Credit The first thing you need to be aware of is that the Tax Cuts and…
Don’t Miss Out on Claiming the Earned Income Tax Credit This Year
The Earned Income Tax Credit (EITC) is a refundable tax credit given to taxpayers that earn a low-to-moderate income from a job or through self-employment. According to the IRS, around 25 million eligible filers received this credit in 2020 and the average EITC was approximately $2,461. However, many eligible taxpayers are missing out on this…
What is the Dependent Tax Credit, Deduction and Exemption?
Are you wondering who can qualify as a dependent on your tax return? This is your guide to assessing whether one of your family members may be able to be classified as a qualifying dependent when you file your taxes. Dependent Tax Credits, Deductions and Exemptions are Available to You! Anyone with a family needs…
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