Child Care Credit
Did you know that a credit is actually a lot better than a deduction? Most people didn’t and neither did I. A credit diminishes your tax bill dollar for dollar. Which means that missing one is a lot more painful than missing a deduction that simply reduces the amount of income that’s subject to tax. In the 25 percent bracket, each dollar of deductions is worth a quarter; each dollar of credits is worth a greenback.
State Tax Paid Last Spring
Did you owe tax when you filed your 2014 state income tax return in the spring of 2015? Then, for goodness’ sake, remember to include that amount in your state-tax deduction on your 2015 federal return, along with state income taxes withheld from your paychecks or paid via quarterly estimated payments during the year. (Source: popsugar.com).
A College Credit For Those Out Of College
College credits aren’t simply limited to just the first four years of college. The Lifetime Learning credit can be obtained for any number of years and can be used to counteract the cost of higher education for yourself or your significant other.
Moving Expenses To Get To Your First Job
Moving expenses to get to a first job are deductible and not many people know about this. However, to qualify for the deduction, your first job must be at least 50 miles away from your old home.
Student Loan Interest Paid Your Parents
If parents pay back a child’s student loans, the IRS considers the transaction as if the money was given to the child, who then paid the debt. However, as long as the child is no longer claimed as a dependent, he or she can deduct up to $2,500 of student loan interest paid by mom and dad each year.
Hopefully this helped you just as much as it’s helped me! Until next time!!