What is My Filing Status?

There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) with Dependent Child. Your filing status is used to determine your filing requirements, standard deduction, eligibility for certain credits, and your correct tax

Who Can I Claim as a Dependent?

Who Can I Claim as a Dependent: There are two types of exemptions, personal exemptions and exemptions for dependents. A dependent’s exemption is an amount you can claim on your tax return to reduce your taxable income. This can result in a decrease in tax and increase the amount of your refund.  You are allowed one exemption for each person you can claim as a dependent. You usually can claim exemptions for yourself, your spouse and each person you can claim as a dependent. You may lose part of the dollar amount of your exemptions if your adjusted gross income is above a certain amount.

Am I Eligible for the Child Tax Credit?

There are two parts of the Child Tax Credit, the Child Tax Credit and the Additional Child Tax Credit.
The Child Tax Credit is a credit that may reduce your tax by as much as $1,000 for each of your qualifying children.
The Additional Child Tax Credit is a credit that you may be able to take if you are not able to claim the full amount of the Child Tax Credit. You may not qualify for the Child Tax Credit, but qualify for the Additional Child Tax Credit.

Am I Eligible for the EIC?

Earned Income Tax Credit also known as EITC or EIC is a tax credit for people who have low to moderate earned income. The earned income can be from working for your employer, yourself or from other sources such as certain disability income. To claim the EIC, you must meet certain rules. These rules are (Click here)

What additional education expenses qualify for the American opportunity tax credit?

For the American opportunity tax credit, qualified expenses have been expanded to include expenditures for course materials, as well as tuition and required fees. For this purpose, the term “course materials” means books, supplies and equipment needed for a course of study whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. Some or all of these expenses will be recorded on Form 1098-T, Tuition Statement. The student should receive a Form 1098-T from the educational institution that the student attended. If the student does not receive a Form 1098-T, the student should contact the educational institution and request the form.

Who can claim the American opportunity tax credit?

Generally a taxpayer whose modified adjusted gross income is $80,000 or less ($160,000 or less for joint filers) can claim the credit for the qualified expenses of an eligible student. The credit is reduced if a taxpayer’s modified adjusted gross income exceeds those amounts. A taxpayer whose modified adjusted gross income is greater than $90,000 ($180,000 for joint filers) cannot claim the credit.

First-Time Homebuyer Credit, Who can claim the credit?

In general, for most people, the first-time homebuyer credit is not available for a home purchased in 2011. However, certain members of the uniformed services and Foreign Service and certain employers of the intelligence community can claim the credit for home purchased in 2011, if they are first-time homebuyers or long-time residents of the same main home.

If you qualify for the credit, you must attach the following documentation regarding your main home (as applicable). If you do not attach the documentation, the credit may not be allowed.

Attach a copy of your settlement statement showing all parties’ names and signatures, the property address, the contract sales price and the date of purchase. In most cases, your settlement statement is your properly executed Form HUD-1, Settlement Statement. In locations where the signatures of the buyer and seller are not required, the IRS encourages the buyer to sign the settlement statement before attaching it to the tax return — even if the settlement statement does not include a signature line.

If you are unable to obtain a settlement statement because you purchased a mobile home, attach a copy of your executed retail sales contract showing all parties’ names and signatures, the property address and the date of the purchase.

When do I repay the full credit?

Here are the conditions when you must repay the full amount of the credit:
• You sold your main home to a related person or entity.
• Your home is destroyed, condemned or disposed of under threat of condemnation and you do not purchase or rebuild a replacement home within two years.
• You converted the entire home to a rental or business property.
• You converted the home to a vacation or second home.
• You no longer live in the home for the greater number of nights in a year.