For purposes of deductions and exemptions, a custodial parent can claim a child as a dependent in many cases. The tax law has very specific rules about who can qualify as a custodial parent. The following describes a specific situation in which the rules of custodial parents needed to be examined closely to determine which […]
— Read moreWhen planning for the next tax year, taxpayers should keep accurate records and receipts of any expenses they plan to deduct. However, if no records exist, the Cohan Rule may benefit the taxpayer in such that it states expenses may be reasonably and credibly estimated. The taxpayer in the next situation benefited from the Cohan […]
— Read moreOnce known as the Hope College credit, the American Opportunity tax credit can save taxpayers up to $2,500 on their 2016 return. Remember: A tax credit is a dollar-for-dollar reduction of your taxable income. In theory, the AOTC translates to $2,500 from the government each year for each qualifying college student in your household. While […]
— Read moreIf your spouse and children are U.S. citizens, it is easy to claim them on your tax returns. You just provide their name and Social Security numbers. It can be a bit more difficult to claim a non-U.S. citizen spouse or children on your return. But, you’re still able to claim them and take advantage […]
— Read moreAfter 2016, the Tuition and Fees Deduction will expire. Currently, you are eligible to deduct up to $4,000 from your taxable income for tuition expenses that you paid for either yourself, your spouse, or your dependents. Expenses paid in 2016 can be deducted if they were paid for one of the following purposes: Education during […]
— Read moreAdjusted Gross Income can impact the credits and deductions you are able to claim, this can lead to a reduction in the amount of taxable income reported on your tax return. You are probably paying more attention to your taxable income then your adjusted gross income when you are preparing your tax return. You should […]
— Read moreThe amount of payments you receive through a year either from a single person or a entity are reported on the 1099-MISC for the year your provided them with service The IRS requires that any company or person who makes payments to report them on a Form 1099-MISC to both the IRS and the payee. […]
— Read moreDo you have a student loan in which you make payments, some of which is applied to interest accrued on the loan? If so, you may be eligible to deduct some of the interest when you file your federal tax return. Your lender will report the amount of interest you paid using IRS Form 1098-E, […]
— Read moreEach state independently determines their own income tax for residents. Depending on which state you live in, you’ll pay a percentage of the amount you earn at your job to the state government. What are State Income Taxes States can tax your income if you are a resident or have some other significant connection to […]
— Read moreIf you or your dependent is enrolled in undergraduate and graduate school, you may benefit from the Lifetime Learning Credit, which covers up to $2,000 in education expenses. In 2016 the rules for the Lifetime Learning Credit haven’t been altered from other years. Not considering any phase-outs, the credit is still worth 20% of qualifying […]
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