Individuals or married couples can be eligible for diverse tax credits, including:
- Child and Dependent Care Credit. Congress created this credit to help people struggling with expenses related to caring for dependents. The child and dependent care credit doubled from 2017 to 2018.
- Lifetime Learning Credit. The purpose of this credit is to use tax relief to encourage education. Qualifying students can get credits worth up to $2,000 to pursue undergraduate degrees, advanced degrees, and some non-formal degrees.
- Mortgage Interest, Homeowners can deduct their mortgage interest for both their primary home and any home equity lines (up to $1,000,000 for single individuals and $500,000 for married individuals filing separately), if those lines are used to improve the home. The amount you can deduct depends on your income bracket.
- Medical Expenses. People can only deduct medical expenses when these costs are over 7.5% of their adjusted gross income.
- IRA Deductions. Individual Retirement Arrangements, call IRAs, allow people to put aside money for retirement. Depending on the situation, contributors may be able to deduct some of all of those funds.
This list obviously just scratches the surface. Speak with an experienced accountant or tax attorney to learn which deductions you qualify to get.
Businesses and corporations an also qualify for many tax credits, including:
- Work Opportunity Expense Credits. The government offers these credits to businesses that hire staff who have traditionally faced barriers to job security (e.g. veterans). These credits are calculated in accordance with the wages paid to staff and they can add up to $4,500 in savings annually.
- Rehabilitation, Energy and Reforestation Credits. Companies making investments in reforestation and alternative energy procedures can qualify for a tax credit for 10% of expenses. This is typically limited to $10,000 annually.
- Small Business Healthcare Credit. If your small business employs fewer than 25 full-time employees and pays at least half of their health insurance premiums, then you may be able to use this deduction.
- Retirement Plan Startup Credit. Small businesses that establish retirement plans may be eligible for a credit if they don’t have more than 100 employees and haven’t had a qualified retirement plan during the three years previous to the new plan.
- Disability Access Credit. Per the Americans with Disabilities Act (ADA), all businesses must be accessible to people with disabilities. If your business has made accommodations for the disabled, the costs of those additions may be deductible.
Depending on your business’s size and industry, there may be further deductions. Discuss the details with a qualified tax law attorney to clarify what you can claim.
If you have questions about estate planning and taxes, call an estate planning attorney, like an Estate Planning Lawyer Belgrade, MT, today.
Thank you to Joel Silverman, Attorney and Author, and the experts at Silverman Law Office, PLLC, for their insight and expertise in estate planning and tax implications.