As individuals begin to file their tax returns for 2015 here are some tax credits that some individuals may qualify for to help reduce, if not eliminate their tax liability.
- Child Tax Credit. This credit may be worth up to $1,000 per child, depending on income. The child must be under age 17 at the end of 2015, as well as be a dependent and a US citizen. Additional information can be found in Publication 972.
- The American Opportunity Tax Credit. This tax credit for education expenses is allowed for parents for up to the first four years of post-secondary (college) education. The benefit of this credit is that it is a “per student” credit. This means the credit can be taken for multiple children in college. The maximum credit per student is $2,500. Additional information can be found here.
- The Lifetime Learning Credit. Like the AOTC, this credit can be claimed for education expenses. The difference between this credit and the AOTC is that this credit is a “per family” credit. This means the maximum amount of $2,000 allowed is in total regardless of how many family members are in college. However, this credit can be used for an unlimited number of years in college. Additional information can be found
- The Saver’s Credit. This credit allows taxpayers with lower incomes a credit of $1,000 (single) or $2,000 (MFJ) who are saving for retirement. This credit helps individuals by allowing them to take a credit based off of money contributed to retirement accounts such as a 401(k) or IRA. This credit is also called the retirement savings contributions credit. Additional information can be found here.
- Child and Dependent Care Credit. This credit can be taken by individuals who pay for child care expenses in order to work or are active seeking work. The credit cannot exceed $3,000 for one qualifying individual or $6,000 for two or more individuals. The amount of the credit also depends on adjusted gross income. Additional information can be found here.
Sterling Raskie, MSFS, CFP®, ChFC®
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