Child Tax
CHILD TAX CREDIT Individual taxpayers are permitted to take tax credit based on dependent children, under 17. Credit $1000 per child. AGI $110000 joint, 55000 separate, $75000 single. Phased out by $50 each $1000. * Married, joint, 2 children. AGI $118700. Child tax credit $1550 (1000x2=2000-450) {50x{(118700-110000)/1000]}
DEPENDENT CARE CREDIT
Under 13/ unable to care for self. If divorced child cant be living with the creditor.
Divorced mother with custody may entitle to credit even though child is dependent of father.
AGI<$15000, child credit is 35% of qualified expenses, $3000= 1 child, $6000= 2 or more. (table if over) * Wife makes $22000 husband makes $1500 child care $1900, max of qual exps $1500
Full time student with little or no income earn $250/mo for 1 child and $500 for 2 or more.
Take the lowest amount to be qualified expenses * Qualified Expenses = * Maximum for child = * Credit % x * Credit allowed =
AMERICAN OPPORTUNITY CREDIT
100% of 1st $2000, .25% of next $2000 of tuition fees. 1st 4yrs room, board, transportation, excluded.
Phase-out Married $160000-$180000, singles $80000-$90000.
40% refundable up to $1000 * Enroll for 12units, father pays tuition $2300. (100%x2000) + (25%x3000) = $2075
LIFETIME CREDIT
Nonrefundable tax credit 20% up to $10000.
Available for under graduate, graduates, professional courses at eligible education. In 1 course, still get credit.
Phase-out Married $102000-$122000,single $51000-$61000 * Single dad, AGI $85000. Pays $5000 tuition for son. $2500 x ($90000 - $85000)/$10000 = $1250 * Take courses to improve skills
20% x full amount.
Cannot take both credits for the same student in the same year. Switch off years.
FOREIRGN TAX CREDIT
Eliminate double taxation on income earned. Make annual election to claim instead of credit * Net foreign income X U.S tax liability
U.S. taxable income
Unused foreign tax
DEPENDENT CARE CREDIT
Under 13/ unable to care for self. If divorced child cant be living with the creditor.
Divorced mother with custody may entitle to credit even though child is dependent of father.
AGI<$15000, child credit is 35% of qualified expenses, $3000= 1 child, $6000= 2 or more. (table if over) * Wife makes $22000 husband makes $1500 child care $1900, max of qual exps $1500
Full time student with little or no income earn $250/mo for 1 child and $500 for 2 or more.
Take the lowest amount to be qualified expenses * Qualified Expenses = * Maximum for child = * Credit % x * Credit allowed =
AMERICAN OPPORTUNITY CREDIT
100% of 1st $2000, .25% of next $2000 of tuition fees. 1st 4yrs room, board, transportation, excluded.
Phase-out Married $160000-$180000, singles $80000-$90000.
40% refundable up to $1000 * Enroll for 12units, father pays tuition $2300. (100%x2000) + (25%x3000) = $2075
LIFETIME CREDIT
Nonrefundable tax credit 20% up to $10000.
Available for under graduate, graduates, professional courses at eligible education. In 1 course, still get credit.
Phase-out Married $102000-$122000,single $51000-$61000 * Single dad, AGI $85000. Pays $5000 tuition for son. $2500 x ($90000 - $85000)/$10000 = $1250 * Take courses to improve skills
20% x full amount.
Cannot take both credits for the same student in the same year. Switch off years.
FOREIRGN TAX CREDIT
Eliminate double taxation on income earned. Make annual election to claim instead of credit * Net foreign income X U.S tax liability
U.S. taxable income
Unused foreign tax