All about American tax relief
Tax levied by the IRS (Internal Revenue Service) is often considered as non-negotiable. IRS gives relief in the form of specified individual tax credits. Though a tax attorney is best qualified to handle the tax credits, this article will provide an American tax relief guide.
Applicability
Application process The information on tax credits that follows is applicable for individual tax payers. The IRS tax code is complicated and a CPA must be hired in order to file the IRS tax return. Professionals can easily help to understand the tough laws and even provide the solid tax relief help. The tax credits will be provided below.
American tax credits (rates effective as at 01.06.11)
Earned Income Credit If you fall in a low income bracket (under $48,362 in 2010), then you can avail of the Earned Income Credit. This credit depends on the number of children you have. For 2011, the maximum amount of credit available is $5,751, if you have three qualifying children. If you are over 65 years of age and your income falls within certain limits, then the IRS entitles you to a tax credit for the elderly and disabled. You have to compute the credit based on a few factors. Retirements Savings tax credit You can also be eligible for a non-refundable Retirements Savings tax credit if you make eligible contributions to IRAs (Individual Retirement Agreement). Your income must also not exceed a certain amount. You can avail of a mortgage interest credit if you have taken a loan to buy a home. To find out if your mortgage loan qualifies and how much credit you can get, visit this link. Child and education credit Families with children can get child tax credit of $1,000 per qualifying child (per 2010 rules) Education-related tax credits are also available. The American Opportunity Credit allows a tax credit of up to $2,500 for undergraduate education, but it will be stopped in 2012. Lifetime Learning Credit allows you a credit of up to $2,000 for any level of college education. First time home buyer credit of $8,000 can be availed by people who have bought a residential home for the first time by 30 September 2010. Credits for investment Individuals can also get Nonbusiness Energy property Credits on investing in renewable energy assets. Individuals can invest in projects which help the nation and this will not be possible without such individual investments. The government allows individuals to avail of Federal non-refundable investment credits for such investments. State tax credits – each American state offers different tax credits to its inhabitants. These vary and it is best for IRS tax help or read through the state tax website to get more information.