Here are five credits the IRS wants you to consider before filing your 2012 federal income tax return:
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- The Earned Income Tax Credit is a
refundable credit for people who work and don’t earn a lot of money. The
maximum credit for 2012 returns is $5,891 for workers with three or
more children. Eligibility is determined based on earnings, filing
status and eligible children. Workers without children may be eligible
for a smaller credit. If you worked and earned less than $50,270, you may still qualify for partial credit. Visit Magic Tax Solutions and speak to one of our tax professionals.
- The Child and Dependent Care Credit is for expenses you paid
for the care of your qualifying children under age 13, or for a disabled
spouse or dependent. The care must enable you to work or look for work.
- The Child Tax Credit may apply to you if you have a
qualifying child under age 17. The credit may help reduce your federal
income tax by up to $1,000 for each qualifying child you claim on your
return. You may be required to file the new Schedule 8812, Child Tax
Credit, with your tax return to claim the credit.
- The Retirement Savings Contributions Credit (Saver’s Credit) helps
low-to-moderate income workers save for retirement. You may qualify if
your income is below a certain limit and you contribute to an IRA or a
retirement plan at work. The credit is in addition to any other tax
savings that apply to retirement plans.
- The American Opportunity Tax Credit helps offset some of the costs that you pay for higher education. The AOTC applies to the first four years of post-secondary education. The maximum credit is $2,500 per eligible student. Forty percent of the credit, up to $1,000, is refundable. You must file Form 8863, Education Credits, to claim it if you qualify.
- The Earned Income Tax Credit is a
refundable credit for people who work and don’t earn a lot of money. The
maximum credit for 2012 returns is $5,891 for workers with three or
more children. Eligibility is determined based on earnings, filing
status and eligible children. Workers without children may be eligible
for a smaller credit. If you worked and earned less than $50,270, you may still qualify for partial credit. Visit Magic Tax Solutions and speak to one of our tax professionals.
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