Source: the-sun.com
While you're gathering the necessary documents to complete your federal tax returns, be sure to look for tax credits and deductions that can save you a lot of money.
The period for submitting tax returns for 2021 has already begun. Before you file with the Internal Revenue Service (IRS), review the list of tax credits and deductions that can lower your tax bill. The tax credits described below may generally.
Child tax credit
If you gave up the Advance Child Tax Credit (CTC) in 2021, you will get the full Child Tax Credit when you file your 2021 tax return. It is $3,600 or $3,000 per child, depending on age. If you received advance CTC payments in 2021, it was only half of the amount up to $1,800.
You can claim the other half when you file your 2021 tax return. Be sure to find letter No. 6419 from the IRS, which lists the payments received for this loan, so that you can indicate them on the return without errors.
Credit for child care
You may be able to claim the Child and Dependent Care Tax Credit if you spent money on the services of a qualified nanny or carer. In 2021, you can claim up to $16,000 in expenses under this credit, but it will only reimburse you for 50%, i.e. no more than $8,000.
You can get the maximum if you have two or more children. If you have one child, you can count on a loan of up to $4,000.
Adoption Credit
Adoption tax credits offset the costs of adoption that you personally incur, and exclude from taxable income financial assistance for adoption provided to you by your employer (available under some programs). The credit is non-refundable, which means you can't get it for cash, but it can be used to pay off any tax debts. If the credit exceeds your tax liability this year, it can be carried forward for up to five years. If the credit exceeds your tax liability this year, it can be carried forward for up to five years. The maximum adoption credit for 2021 is $14,440 per child.
Credit for missed coronavirus payments (Recovery rebate credit)
If you didn't get your third pandemic payment, paid out, or got less than the full amount, you may be eligible not to get that money after you file your 2021 return. The fact is that the coronavirus payments were calculated on the basis of declarations for 2020, but in 2021 your income could have been lower, which means that you were entitled to the largest amounts of payments.
Earned Income Tax Credit
To qualify for the earned income credit, you must have that earned income (explained below) and meet certain requirements for your adjusted gross income (AGI) levels.
Earned income includes all taxable income and wages you received from working for someone else, yourself, or from your own business. The maximum credit you can claim for 2021 is $1,502 if you have no children, and up to $6,728 for parents of three or more qualifying children.
Loan for the elderly or disabled
You can qualify for this loan if you are 65 years of age or older or have retired early due to permanent and total incapacity. The amount of this loan varies from $3750 to $7500.
Lifetime education loan
The education loan is designed to compensate for the costs of education. It is paid to students of certain institutions and requires the fulfillment of a number of conditions. This loan can be used to pay for undergraduate, graduate and professional courses.
The number of years during which you can apply for a loan is not limited. Up to $2,000 can be reimbursed for a tax return.
American opportunity tax credit This credit offsets educational expenses (yours or your children's)
during the first four years of college or postsecondary education. You can receive no more than $2,500 per student per year. If the credit reduces your tax debt to zero, you can receive 40% of the remaining credit amount in cash (this payment cannot exceed $1,000).
The Opportunity Credit amount is 100% of the first $2,000 of qualified education expenses. You can then earn 25% of your next $2,000 in spending.
Credit for energy-efficient living
An individual can claim a tax credit to cover up to 10% of the cost of modifications that increase the energy efficiency of his home.
Eligible compensation includes:
-Energy-saving external windows, doors and skylights.
-Roofs (metal and concrete) and roofing products.
-Insulating materials and their installation.
-Energy-efficient heating and air conditioning systems.
-Water heaters (natural gas, propane or oil).
Saver's credit
The contributor's tax credit is available to taxpayers who contribute funds to their retirement account during the tax year. Previously, it was called retirement savings contributions credit.
The credit amount is up to $1,000 for those filing individually and up to $2,000 for spouses filing a joint return. The amount of the credit can vary and depends on the taxpayer's adjusted gross income and the amount of contributions
