Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.
Last year, an estimated 21 million taxpayers received approximately $37.5 billion in EITC. However, the IRS estimates Read More
The adoption tax credit provides an incentive for individuals or families to adopt a child. You may qualify for the adoption credit if you adopted or attempted to adopt a child in 2014, and paid qualified expenses relating to the adoption. The credit is valued at up to $13,190 for each effort to adopt an eligible child. The effort ends when the child is adopted. For 2014, the adoption credit is a nonrefundable credit
A credit for adoption is available for persons who:
• Adopt a domestic (US) child under the age of 18
• Adopt a domestic special needs child (certified by a state agency)
• Adopt a foreign child whose adoption became final in the current tax year Read More
A nonrefundable tax credit is a credit that can reduce the amount of an individual’s tax liability to zero, but cannot exceed the total amount of income taxes owed. In other words, you would not receive a tax refund if the credit exceeds the amount of your tax liability. For example, if you have a nonrefundable tax credit of $5,000 and a tax liability of $3,000, the credit will eliminate the tax liability, that is, reduce it to zero. The remaining $2,000 of the credit, however, will be lost, because the IRS will not send you a refund for this amount.
Nonrefundable credits for tax year 2014 include the following:
• Credit for child and dependent care expenses.
• Child tax credit. Read More
With my family snugly content amidst a long holiday season I felt compelled to pen some thoughts regarding the ubiquitous United States Tax Code and all its myriad of seemingly scary changes looming around the proverbial corner. This post lists ten tax matters to be aware of in the new year that have come up in conversations with clients. It also offers four recommendations to minimize tax obligations that I’ve found myself repeatedly trumpeting whenever asked. And finishes with some quick reference tax facts.
1. For 2013 the self-employment tax has reverted back to its normal 15.3% rate, and the limit for the Social Security portion of the tax has increased to $113,700. Read More