Are You Eligible For Any Of These Tax Credits?

Written by Richard A. Chapo

Taxpayers should consider claiming tax credits for which they might be eligible when completing their federal income tax returns. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable – taxes could be reduced torepparttar point that a taxpayer would receive a refund rather than owing any taxes. Below are some ofrepparttar 148227 credits taxpayers could be eligible to claim:

Earned Income Tax Credit

This is a refundable credit for low-income working individuals and families. Income and family size determinerepparttar 148228 amount ofrepparttar 148229 EITC. Whenrepparttar 148230 EITC exceedsrepparttar 148231 amount of taxes owed, it results in a tax refund to those who claim and qualify forrepparttar 148232 credit.

Child and Dependent Care Credit

This is for expenses paid forrepparttar 148233 care of children under age 13, or for a disabled spouse or dependent, to enablerepparttar 148234 taxpayer to work. There is a limit torepparttar 148235 amount of qualifying expenses. The credit is a percentage of those qualifying expenses.

Adoption Credit

Adoptive parents can take a tax credit of up to $10,390 for qualifying expenses paid to adopt an eligible child. A credit of up to $10,390 may be allowed forrepparttar 148236 adoption of a child with special needs even if you do not have any qualifying expenses. For more information, see Pub. 968, Tax Benefits for Adoption.

Credit forrepparttar 148237 Elderly and Disabled

This credit is available to individuals who are either age 65 or older or are under age 65 and retired on permanent and total disability, and who are citizens or residents. There are income limitations. For more information, see Pub.524, Credit forrepparttar 148238 Elderly orrepparttar 148239 Disabled.

Reservists, Enlistees May Get Deferral of Back Taxes

Written by Richard A. Chapo

Reservists called to active duty and enlistees inrepparttar armed forces may qualify for a deferral of taxes owed if they can show that their ability to pay taxes was affected by their military service.

The deferral covers active duty members ofrepparttar 148226 military services — Army, Navy, Air Force, Marine Corps and Coast Guard — and commissioned officers ofrepparttar 148227 uniformed services — Public Health Service andrepparttar 148228 National Oceanic and Atmospheric Administration. Reservists must be placed on active duty to qualify. National Guard personnel not serving in a “federalized” status — that is, called to active duty specifically byrepparttar 148229 president ofrepparttar 148230 United States — are not covered.

The deferral applies to taxes that fall due before or during military service, and extendsrepparttar 148231 payment deadline to six months (180 days) afterrepparttar 148232 military service ends. No interest or penalty accrues duringrepparttar 148233 deferral period.

The deferral is not automatic. A taxpayer must apply for it. When applying,repparttar 148234 taxpayer must show howrepparttar 148235 military service affectedrepparttar 148236 taxpayer's ability to pay. A taxpayer must also have received a notice of tax due, or have an installment agreement withrepparttar 148237 IRS, before applying forrepparttar 148238 deferral.

The deferral does not extendrepparttar 148239 deadline for filing any tax returns. However, taxpayers inrepparttar 148240 armed forces may get extra time to file under other provisions, such as being stationed overseas, in a combat zone or in a qualified hazardous duty area, or if they are serving in direct support of a combat zone.

Cont'd on page 2 ==> © 2005
Terms of Use