Taxpayers who invest in real estate realize that the home mortgage interest deduction is one of the easiest and most commonly claimed real estate tax deductions. According to IRS guidelines, homeowners may deduct the home mortgage interest they pay during the year, as long as the property meets certain guidelines. If you've been wondering how you can claim the mortgage interest deduction, here's a primer on the requirements and qualifications.
Having a baby is a fairly expensive endeavor in the U.S. and most of these costs begin during the pregnancy. According to the tax code, some pregnancy-related child expenses are tax deductible but others are not. Learning which maternity expenses you can deduct can help you keep good records throughout your pregnancy.
s who make contributions to retirement plans administered by their employers may be eligible to claim the Retirement Savings Contributions Credit, also known as the Saver's Credit, on their federal income tax returns. This credit allows qualified taxpayers to receive a tax credit based on the amount they contribute to their retirement plan during the tax year. While it is relatively easy to file for the Saver's Credit, meeting the qualifications to claim it can be a bit tricky.
The Earned Income Tax Credit (EITC) is one of the most commonly claimed income tax credits in the IRS code. This credit, which is designed to provide financial assistance to low-income taxpayers and their families, is one of the few refundable tax credits allowed by the Internal Revenue Service. Unlike other tax credits that simply reduce the amount of tax liability, the EITC directly increases a taxpayer's refund. However, in order to claim the credit, taxpayers must meet very strict requirements regarding their qualifying relatives, earned income amounts, and filing statuses.
When taxpayers are searching for overlooked end-of-year tax deductions to include, they may wonder whether they qualify to deduct the cost of any funeral expenses they had during the year. In the vast majority of cases, however, funeral expenses are a nondeductible expense, which means that they cannot be deducted on a tax return. There are a few tax returns each year. They may legitimately include the cost of funeral expenses as a deduction.
Taxpayers who purchase plug-in electric drive vehicles may be eligible to claim a tax credit. Since 2009, the IRS has provided the Plug-In Electric Drive Vehicle Credit for individuals who purchase qualified electric vehicles during the tax year. Depending on the type of vehicle, taxpayers may be eligible to claim a tax credit of up to $7,500 on their qualified purchases. As a tax credit, the Plug-In Electric Drive Vehicle Credit reduces overall tax liability.
Have you or one of your family members been thinking about returning to college? As the recession drags on, more and more Americans are deciding to return to school to complete a degree or switch careers. While the U.S. government provides several financial aid sources, taxpayers may still have to pay some of their education expenses out of their own pockets. To ease this financial cost, the IRS allows individuals to take advantage of two education tax credits: The Lifetime Learning Credit and the American Opportunity Tax Credit.
Service businesses such as restaurants, bars, and salons often receive tips in addition to their payments for services rendered. Tips are usually given in appreciation for exceptional service or to ensure that the individual server or salesperson receives a portion of the profits. While business owners do not receive income from the tips, they are often required to match FICA taxes, which include Social Security and Medicare taxes, on these payments. Under a special tax credit called the FICA Tip Tax Credit, though, small business owners can claim a tax credit that reduces their share of the matching FICA taxes on tips.
Following the economic recession of 2008-10, the United States government took extraordinary measures to attempt to shore up the national economy. One of the major areas of concern was unemployment. Rising unemployment figures pushed the national unemployment rate up to 10 percent, placing a strain on federal unemployment funds.
Taxpayers who are subject to foreign income taxes may qualify to take a foreign tax credit against their U.S. tax liability. In most cases, these foreign income taxes are levied on individuals who have partial-year residency in a foreign country or who receive income from foreign-based business activities. The IRS has created the foreign tax credit to help taxpayers offset these additional charges.
