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10 Cards in this Set
- Front
- Back
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II. TAX CREDITS
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1. Personal Tax Credits
2. Refundable Credits |
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1. Personal Tax Credits ( no refund )
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May reduce personal tax liability to zero, but they may
not result in a cash refund a. Child and dependent care credit b. Elderly and permanently disabled credit c. Education credits (Lifetime Learning credit) d. Retirement savings contribution credit e. Foreign tax credit f. General business credit |
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2. Refundable Credits
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a. Child tax credit (refund is limited)
b. Earned Income credit c. Withholding taxes (W-2) d. Excess Social Security paid e. Long-Term Unused Minimum Tax Credit f. American Opportunity credit (40% refundable) g. Adoption Credit (2010 and forward) |
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1. Personal Tax Credits ( no refund )
a. Child and dependent care credit |
A tax credit of 20%(rich) to 35%(poor) of eligible expenditures:
Maximum Expenditures: (1 dependent: $3,000) - (2 or more : $6,000). Eligible people = 13 years old (kids) or disabled at any age |
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b. Elderly and permanently disabled credit
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This credit of 15% of eligible income is available to individuals who are:
a . 65 years of age or older or b. Under 65 and retired due to permanent disability |
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c. Education Tax Incentives
a. American Opportunity Credit (AOC) b. Lifetime Leaming Credit c. Coverdell Education Savings Account Distributions |
Education Tax Incentives-Phased out for high-earning taxpayers ($160,000 joint).
a. American Opportunity Credit - AOC- (maximum credit of $2,500 Eligible during first 4 years of college) b. Lifetime Leaming Credit (($2, 000 maximum per year & Available for an unlimited number of years.) c. Coverdell Education Savings Account Distributions ( exclude from AGI any amounts distributed from a Coverdell Education Savings Account |
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d. Qualified Tuition Programs (QTP)
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cash contributions to an account on behalf of a beneficiary for payment of qualified higher
education expenses. Exempt from all federal income taxation. Distributions from a QTP are excluded |
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e. Adoption C redit
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1 . Limit per child = $12,650
2. Phase-out : modified adjusted gross income between $189,710-$229,710 Eligible Expenses : -necessary expenses -not available for adopting the child of a spouse ( blended family) - not medical expenses |
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f. Retirement Savings Contributions Credit - ( EZZAT)
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*Eligible Taxpayers
a. At least 18 by the close of the tax year b. Not a full-time student c. Not a dependent 2. Allowable Credit (2012 tab/e) |
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F. Foreign Tax Credit
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XXX
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