Understanding Available Tax Credits And Deductions

Paying taxes can be difficult for many Americans; it is something that is required of citizens and one should consider it a privilege to help uphold their country, but it is not uncommon for an individual to owe more than they originally expected for the fiscal year.

Taxes have been around in some form since the country’s creation, and are a way for citizens to help support the United States, uphold it, and keep it functioning properly.

Depending upon whether they are state or federal, the money is utilized for different things. It can be used for education funds, supporting those that are on welfare, taking care of the military, and managing the country’s national parks, roads, and highways.

No matter what the money is used for, it is an American’s duty and right to pay income taxes each year. Because there are so many different income levels within the country, the amount to be paid is different for each person and family. The different circumstances present with each allow for different deductions and breaks to be given to those who need them.

In past years, workers have received credits depending on their income and marital status. However, with the Obama administration, these types of credits are not expected to take place again.

Those that have dependents who they care for and take care of may be eligible to receive some kind of compensation from the government. There are a few restrictions and necessities for this to be possible, however,

First of all, the child has to be under the age of nineteen at the end of the year; this means that any child that is older than this age after this point in time is ineligible to be filed for as a dependent for exemption purposes. Exemption refers to the amount of money that is deducted from the adjusted gross income, which is the amount that is taxed on by the government.

In other words, the more exemptions you received, the lower of an income you are taxed for which mean a great deal less in payments than you would originally have to take care of. The amount that is exempt is presently over thirty-five hundred dollars, but may be decreased or increased depending upon the administration that is governing.

This exemption can not only be used on an individual’s child or children, but other step-children or relatives that they have in their care. However, they must live with the parent more than half of the year and not be responsible for more than half of their own support.

Couples can receive a good deal of exemption, depending upon the number of children that they care for. Even those with only three can receive over eighteen thousand dollars worth of exemption from their adjusted gross income.

Another tax credit that many individuals are not aware of refers to those that take an extra effort to have an energy efficient home and lifestyle. Those that install solar panels on their homes or make use of alternative forms of energy for their daily power can receive a deduction from the government.

Many may also be able to get a large amount of their installation and product fees paid for by the United States, but they have to apply and go through the process of getting this approved. The amount usually equals up to thirty percent of their overall costs with a limit of fifteen hundred dollars.

The United States government has been making changes to encourage citizens to increase energy efficiency, so it may be possible that more credits will be distributed in future years. Parents that are putting their children through college may also be able to receive an exemption, deduction, or credit depending on how they are funding the education.

The maximum deduction available for those who are paying their child’s college tuition is four thousand dollars, but may be reduced to two thousand or completely disappear as their gross income increase.

This means that those with a higher income or one that is noticeably different than the average for the country should not expect to receive a great deal of help, even if they are contributing to their dependent’s education.

Understanding all of the different deductions, credits, breaks, and exemptions available can be difficult, so it is best to consult someone that is experienced in finance and aware of the different ways to help you save. Doing so can make all the difference when tax season rolls around!

Jack R. Landry has worked since 1988 as a tax attorney. He has written hundreds of articles about finding a Los Angeles Tax Lawyer.

Contact Info:
Jack R. Landry
JackRLandry@gmail.com
http://www.TaxCrisisInstitute.com

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