No children to claim?

Greetings,

Many of my clients ask me what credits are available to help boost their refund If they do not have any children to claim?

My short response... A LOT! Seriously there are many credits out there for individuals with out any children. I get excited when I hear this question because I get a chance to show off what I know. Below I've summarized a few credits that popped up in my mind. Hope this helps. Of course, you're welcome to contact me for a free consultation.

To start out let me define TAX CREDIT. Basically a TAX CREDIT  IS A DOLLAR FOR DOLLAR REDUCTION OF YOUR TAX LIABILITY. This is what DIRECTLY increase your refund.

SHORT LIST OF CREDITS:

• Earned Income Credit
• Education Credit
• Tuition and Fees
• Student Loan Interest
• Tax credit for the elderly or the disabled
• Foreign tax credit
• Tax credit for IRA and retirement plan contributions (the retirement savings contribution, or “savers” credit)
• Health insurance premium assistance credit (not available prior to 2014)
• Tax credits for certain qualified fuel cell and plug-in electric drive motor vehicles
• Tax credit for purchasing qualified energy-efficient property (e.g., solar water heater)
• Adoption Credit

DESCRIPTIVE LIST: (Shout to www.IRS.GOV for free information)

 

Earned Income Tax Credit

The amount of the credit depends on your income and the number of qualifying children you have. For people with wages, salaries, tips, self-employment income and other earnings, the EITC gives up to:

·        $6,143 to households with three or more children

·        $5,460 to households with two or more children

·        $3,305 to households with one child

·        $496 to households with no children (only if you were between ages 25 and 64 in 2014)

 

Tuition and fees TAX deductions:

·        This deduction can reduce the amount of your income subject to tax by $4,000 or less.

·        You may be able to deduct qualified education expenses for yourself, your spouse or a dependent.

·        The education expenses must be for higher education (after high school). They include tuition and other required fees and expenses (activity fees, books, supplies, equipment). You can’t include personal expenses such as room and board.

Education Credits:

1. American Opportunity Credit

·        You can receive a credit of up to $2,500 per student.

·        It can only be used for the first four years of post-secondary education (after high school) for an undergraduate degree or other recognized education credential.

·        Up to $1,000 of the credit is refundable, so you can receive it even if you don’t owe taxes.

2. Lifetime Learning Credit

·        You can receive a credit of up to $2,000 per student.

·        It can be used for all years of post-secondary education (after high school) and for classes to improve job skills (non-degree programs are included).

·        The maximum credit is limited to the amount of tax you owe on your return.

 

Student  Loan interest deduction

If you paid interest on a student loan and your income qualifies, you may be able to reduce the amount of your income subject to tax by up to $2,500.

Savers Tax Credit

The SAVERS CREDIT formerly the Retirement Savings Contributions Credit, is for eligible contributions to retirement plans such as qualified investment retirement accounts, 401(k)s and certain other retirement plans. Taxpayers with the least income qualify for the greatest credit -- up to $1,000 for those filing as single, or $2,000 if filing jointly.

Should I just DO IT MYSELF

Question of the week: Do your own taxes or use a professional?

Short politically correct answer: Sure, why not do it yourself if you can. But I wouldn't (read more)....

I often watch YouTube videos of new hair styles that I want to try. I watch the same video clip at least 50 times in hopes of imitating the technique used. The girl in the video always make things look so easy; 1.2.3 and done! When I go and try it myself, for some reason odd reason it never turns out the way i saw it in the video. It may be just my luck. I believe the same concept applies to taxes. You may have watch a preparer complete your return several times; it looks simple. It's only data entry. Right?

Well, to help you evaluate if and when you need to use a tax professional, I'm going to highlight the Pros and the Cons of doing it yourself. I want to stress the list below is not comprehensive. If you have a complicated tax return or is remotely interested in MAXIMIZING YOUR REFUND, then

USE A PROFESSIONAL (PERIOD) .

Consequences of not hiring a tax professional:

1. Miss out on credits/deductions: many people do not claim certain credits they are eligible for because they fear the IRS will audit their return. That is why tax offices can almost guarantee you a refund if you allow them to review your past tax returns that you've completed.

2. Miss out on the benefits of itemizing: many people don't itemize because they don't know what is appropriate to claim. When they do itemize, they are not certain on what to enter to get the full benefit of the credits or how to re-define expenses to their advantages. For example, mortgage related expenses, lost from a theft can be claimed, car registration, gambling lossess, medical expense charitable contribution, tithes, all can be itemize. And there's many more.

3. Extra eyes prevent mistakes:  

4. Tax Preparer is responsible for what is entered in your return, so they are your advocate if the IRS perform an audit.

5. Waste time looking over tax documents that are confusing. The IRS estimated the average taxpayer who file their own tax return spends about 23 hours trying to figure it out. Seriously this year is not the year to get it wrong. There has been many changes due to laws that took effect under President Obama. Unfortunately, it will cost you more if you make a mistake this year.  

Pros of filing yourself:

1. Save $100-200 in preparation fees. (note tax preparation fees are deductible in your return)

2. Keep your personal information private

3. Your life situation is simple. Example: 1 job, no kids, no house, no investments, no major events occurred.

4. understand tax laws and changes in the tax codes

5. Convenience of doing it from home.

 

Can you claim your bae as a dependent for taxes?

We all know if you don't have kids to claim for tax season, then most likely you ain't getting back a huge refund from Uncle Sam. Well that may true, but you can still claim head of household filing status with a qualifying relative. Many people don't know this fact plus they are not sure how to enter a qualifying relative in the tax software's as to not trigger an audit.  It's a common mistake, that the IRS will not automatically tell you about. They do their jobs to take your money, and you should do yours to get theirs!

To help clarify the difference with qualifying child and qualifying relative, I've indicated below who can be claim and under what circumstances. I've also included a link to the IRS website where you can play with the app to see if that person you've been supporting can be claimed. Hope this helps. Call me if you have more questions: 407.716.8518.
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 Criteria for who qualifies as a "child." Here are the highlights [source: IRS]:

• Relationship: A "child" can either be a biological child of the taxpayer, a stepchild, an adopted or foster child, or even a sibling or stepsibling of the child. Descendants of any of these folks are also OK.
• Residence: The child must live with the taxpayer for more than half of the tax year.
• Age: The child must be under 19 on Dec. 31 of the tax year, or under 24 if a full-time student.
• Support: The taxpayer must provide more than half of the child's financial support for the year.

Dependents who are not children are called qualifying relatives. Here are the criteria [IRS]:

• Relationship: Parents, great aunts, cousins, step-brothers all qualify -- in fact, you don't have to be related to the person at all, provided they meet the other requirements.
• Residence: An actual relative does not have to live with the taxpayer, but nonrelatives like roommates or friends have to live with the taxpayer full-time.
• Age: A qualifying relative can be any age.
• Support: The taxpayer needs to provide more than half of the dependent's financial support during the tax year and the dependent's gross income must be less than the personal exemption of $3,950 in 2014
  
  . Also, the dependent cannot take the personal exemption on his or her tax return at the same time

Be gentle, it's my first time ;)

Hi,

Welcome to my blog spot, Beyond TAX Season. To start off, i want to warn you this is my first time blogging. So please be gentle with me. With that being said, the purpose of this blog is share educational information regarding taxes, personal finances, budgeting, and business tax planning. I am not a guru; but I have educated myself regarding certain topics. In addition, I'm great at researching.  I plan  to share credible data I find on my quest regarding the above topics.

My hope is share information that is usefull to your success. I welcome a productive conversation about money.  So please provide feedback regarding any topics I post. I don't plan to write novels here but bullet points and sometimes videos.

Lastly, I do want to disclose that I own a tax preparation business called, Courageous Tax Services. I've been helping clients for over 7 years. My ultimate goal is to EMPOWER CLIENTS TO VISION AND PURSUIT FINANCIAL GOALS BEYOND THE TAX SEASON. This platform is another way  for me to empower my clients with education.

Well that's all for now folks. Thank you for reading my first post.