Tax benefits come in the form of deductions, credits, and exemptions. The implications for tax payers is to reduce their total tax liability due, and to some, give an additional boost of income when refunds are issued. I believe that each benefit effects people differently depending on their situation, or if they are eligible to claim the benefit. There are some credits that make it easier for students to get their higher education.
I believe the more people that obtain a higher education; it in turn helps build a better society. There are also credits for things like Energy Efficiency, which may help homeowners upgrade their current systems, and provide a more “green” lifestyle, which helps with the environment.Below are some credits and a brief description of what it can help with. Earned Income Tax CreditThe Earned Income Tax Credit, EITC or EIC, is a benefit for working people with low to moderate income.
EITC reduces the amount of tax you owe and may give you a refund.Child & Dependant Care CreditA credit for the costs of care for a qualifying individual to allow you to work or look for work.Adoption CreditA nonrefundable tax credit for qualified adoption expenses paid to adopt an eligible child.Child Tax CreditA tax credit of up to $1,000 per qualifying child. Credit for the Elderly or disabledA credit for taxpayers:aged 65 or older OR retired on permanent and total disability and received taxable disability income for the tax year; ANDwith an adjusted gross income OR the total of nontaxable Social Security, pensions annuities or disability income under specific limits Savers CreditA credit to help low- and moderate-income workers, who have an adjusted gross income (AGI) that does not exceed $30,000 ($45,000 if head of household; $60,000 if married filing jointly), save for retirement.
Mortgage interest CreditThe mortgage interest credit helps lower-income individuals afford home ownership.Residential Energy Efficient Property CreditA credit of 30 percent of the expenditures made by a taxpayer during the taxable year for:qualified solar electric systems;qualified solar water heaters;qualified fuel cell property;qualified small wind energy property; andqualified geothermal heat pumps. Lifetime Learning CreditA credit for up to $2,000 per year to pay for qualified tuition and required enrollment fees at an eligible educational institution for you, your spouse or a dependent, if your modified adjusted gross income (MAGI) is $65,000 or less ($130,000 or less for married filing jointly).American Opportunity Tax Credit.A credit for tuition, required enrollment fees and course material for the first four years of post-secondary education for up to $2,500 per eligible student per year.
Your modified adjusted gross income (MAGI) must be under $90,000 ($180,000 for joint filers) and you must not have claimed the AOTC or the former Hope Credit for more than four tax years for the same eligible student. Forty percent of this credit may be refundable.
