Top 5 Tax Credits for 2015 for Americans
As you prepare to file your tax returns, you may be wondering if there are any tax credits you can get to acquire a little more money in your return. The thought of having to file your taxes is cringe worthy, but knowing that there are tax credits you can get that are simple to discover may ease your mind.
Earned Income Tax Credit
Earned income tax credit is one of the most substantial credits a taxpayer can get. This was established in 1975 and was meant to ease the burden of Social Security taxes and give people an incentive to work. This credit is determined by income and is put into phases according to filing status such as single, married filing jointly or either of those options with children. The amount of credit is based on your adjusted gross income, investment income and earned income. You must be at least 25 and younger than 65 to qualify.
American Opportunity Tax Credit
This credit is earned if you have paid two years of undergraduate tuition. If you want to earn this credit, you better do it this tax season or next tax season since it expires in December of 2017. This credit also covers four years of post-secondary education and broadens the range of taxpayers by increasing the maximum income level. If you have a modified gross income of $80,000 or less for an individual, or $160,000 or less for couples filing jointly, you are eligible for the full credit. You may also receive up to $2,500 of the cost of qualified tuition and course materials depending on your credit. In order to get this, you must be enrolled at least half-time for at least one academic period.
Lifetime Earning Credit
This credit is a little like the American Opportunity Tax Credit. This credit was established to offset the cost of post-secondary education. This credit is different from the AOTC because it is available for any years of post-secondary education. It is also available for those who are not pursuing a degree. You can receive as much as $2,000 per student who is eligible. Full credit is available for those who make $55,000 or less, or $110,000 for married couples filing jointly.
Child and Dependent Care Credit
This credit is meant to help with the costs of babysitting or daycare. This credit is available to those who are paying for childcare for dependents under the age of 13 in order to work or look for work. This credit is also available for the cost of caring for a dependent or spouse of any age who may be physically or mentally incapable to care for themselves. In order to receive this, you must be single, married filing jointly, head of household or a widow or widower with a dependent child who may qualify. This credit may provide up to 35% of expenses that qualify depending on adjusted gross income.
Savers Tax Credit
This credit, formerly known as the Retirement Savings Contributions Credit, is for those who have made eligible contributions to retirement plans such as the 401(k)s, qualified investment retirement accounts, and other certain retirement plans. Those with the least income will qualify for the highest credits up to $1,000 for those filing single, or $2,000 for those who are filing jointly. The maximum credit that can be earned for single filers is $35,500, $45,750 for heads of household with income and $61,000 for those who are married and filing jointly. You must be 18 years old and not have been a full-time student during the year you claimed can cannot be a dependent on another person’s tax return.
These credits may not be much, but they are definitely helpful when you need a little extra money in your return.