The tax credits are deducted from the tax owed. The American Opportunity Tax Credit is available for all four years of college (higher education). You receive a tax credit on 100 percent of the first $2,000 spent on qualifying college expenses and 25 percent of the next $2,000 for a maximum of $2,500 per student. That’s $2,500 deducted from the amount of tax owed (as long as you meet certain income requirements regarding school courses that improve job skills). For more information Visit our Office or Ask to our Accountants.
LIFETIME LEARNING CREDIT
The Lifetime Learning Credit is great for adults boosting their education and training. This credit is worth a maximum of $2,000 per year (up to 20 percent of up to $10,000 spent on post-high school education) and helps pay for college and educational expenses that improve your job skills. For more information Visit our Office or Ask to our Accountants.
EARNED INCOME TAX CREDIT
To qualify for Earned Income Tax Credit (EITC) you must have earned income from working for someone or from running or owning a business or farm and meet basic rules. And, you must either meet additional rules for workers without a qualifying child or have a child that meets all the qualifying child rules for you. For more information Visit our Office or Ask to our Accountants.
FOREIGN TAX CREDIT
Foreign tax credits allow US taxpayers to avoid or reduce double taxation. You may choose to take a deduction for foreign taxes paid instead of choosing a credit. In most cases, it is to your advantage to take foreign income taxes as a tax credit. You can claim a credit only for foreign taxes that are imposed on you by a foreign country or US possession. For more information Visit our Office or Ask to our Accountants.
CHILD AND DEPENDENT CARE CREDIT
If you paid someone to care for your child, spouse, or dependent last year, you may be able to claim the Child and Dependent Care Credit on your federal income tax return, but some restrictions apply. For more information Visit our Office or Ask to our Accountants.
CHILD TAX CREDIT
This credit is for people who have a qualifying child. It is in addition to the credit for child and dependent care expenses and the earned income credit. The maximum amount you can claim for the credit is $1,000 for each qualifying child. For more information Visit our Office or Ask to our Accountants.