If you paid tuition at a qualifying college or other higher education institution you will received a Form 1098-T: Tuition Statement. If you go to a college, university or vocational school that participates in the Department of Education programs for student aid they are qualified institutions. Form 1098-T will listed any expenses related to your education, this will help you figure out your eligibility for tax deductions and credits related to your education and tuition. If you are claimed as a dependent, your parent or guardian will be able to claim the credits and deductions. (more…)

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Certain federal tax guidelines allows you claim children as dependents up to 23 years old. Generally you can claim children 19 years and younger, but there are a few different guidelines for full-time students. Any child that is 23 years old or younger and is a full-time student may be claimed as a dependent if you provided over half of their support.

Full-Time Student Status

In order for a student to be considered full-time they have to meet the following requirements. Over five separate calendar month students must meet the following:

  • Have enrollment in a school that has a regular staff, course of study and a student body that regularly attends school or
  • Be part of an agricultural related training program that is set on a farm and is guided by either state, county, or local government or qualified school.
  • Are enrolled for a specific number of full-time hours that are required by the school that they attend.

Five consecutive calendar months are not required. Students enrolled in elementary, junior and senior high school, college, university, trade, technical or vocational schools are all applicable as full-time students. Students enrolled in programs such as training courses, night school and correspondence schools are not covered for tax purposes.

Half Support Guidelines

The first step is to determine how much support the student totally received. This includes any expenses such as food, housing, education, medical and dental care, clothing, transportation and even some recreation activities. Then you can determine if you provided over half of the students support.

These expenses are not deductible come tax time they can qualify a student as your dependent. You may not be required to include any scholarships or grants as student has received when determining if you paid over of their support, but theses tax-free awards are considered your child’s income.

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The top method of receiving a refund is by having it direct deposited into your bank account. This is the top way many taxpayers get their federal income tax refund. When combined with electronic filing it makes receiving your refund quick and easy and is one of the safest ways to get your money back. In 2014 almost 90 million people received their refund via direct deposit, this method is expected to be just as popular in 2015. This tax season when expecting a refund consider having it direct deposited into your bank account. (more…)

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Choosing the correct filing status can not only affect your tax liability but also any credit you may be entitled to at tax time. Some filing status may also determine if you even have to file taxes for the year.

According to the IRS, anyone that married before December 31st of the tax year is considered married for the full year. There are special rules for same-sex marriages. If the location you were married recognizes same-sex marriages, the IRS allows you to file your taxes under married status regardless of whether the law where you reside recognizes same sex marriage. (more…)

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Planning for the future can be a good investment, whether you decide to build a savings fund through an IRA or 401(k) plan, there is a chance that you may qualify for tax credits. For tax payers with qualifying savings plans you may be eligible for The Savers Credit, which can help reduce your tax liability. This credit also known as, The Retirement Savings Contribution Credit can provide a maximum tax benefit of up to $2,000 for married couples who file jointly and $1,000 for single tax payers.

You’re filing status and annual income will determine if you are eligible for the credit. For 2014 the following items will help determine if you can take The Savers Credit (more…)

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Parental Tax Credits

March 5, 2015

As a parent you may be eligible for additional tax credits. The IRS provides credits that are geared towards parents, these credit can help offset the cost or raising children and can help you save money at tax time.

The credits below can be claimed on children who are considered dependents including children born in the current tax year. These credits are made available to all parents who qualify. (more…)

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One fact to remember when trying to figure out the difference between taxable and non-taxable income is that not all income is specifically excluded by to be taxable.

Pretty much any tips or wages made from employment is considered taxable income. Also income gained from services and/or property, no matter if it is cash or not is taxable. For example, the exchange of goods between parties is required to be included in your tax filings with the fair market value of the items. (more…)

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The Earned Income Credit was put into place almost 40 years ago. This credit has been helping low and moderate income workers boost their revenues. The IRS would like to see everyone that is eligible claim the credit, currently only 4 out of 5 workers are actually claiming the Earned Income Credit.

If you qualify for this credit it can help give a boost to your budge when it comes tax time. Here are some facts you should know about the EIC:

Are you eligible?

If you’re family or financial situation has changed the past year it may make you eligible where you haven’t been in the past. You should always review the requirements of the credit each year, you must claim the EIC in order to receive it. If you have worked throughout the year and have an earned income of under $52,427 you may qualify for the benefit. Even if you are not required to file a tax return you may still file a claim for the credit. (more…)

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At tax time, you may find yourself considering the affect your IRA contributions may have on your taxes. If you’re planning to fund your retirement through the savings you’ve contributed to an IRA, you should be aware of what will be expected each tax season.

Traditional IRAs require the contributor to be under the age of 70 ½ by the last day of the year (December 31st), where Roth IRAs are not subject to a contribution age restriction. You are required to have taxable income if you want to save for retirement using an IRA. Wages, salaries, net self-employment profits, tips, commissions, bonuses, and any money received in alimony are all considered as taxable income. (more…)

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If you work from home there are some new options for claiming home office deductions making the process simpler and saving you time. Starting this tax year the IRS has simplified the process of claiming deductions when you use your home as a business, not only does it make it easier but it will help you maintain the necessary records needed. There has been no change in the current eligibility requirement for the deductions, so you should make sure you qualify.

One of the requirements of claiming a home office deduction is that the area of your home that you conduct business in has to be exclusively used for that purpose and must be designated for business functions. In addition to the aforementioned requirement, your home office must also adhere to the following guidelines: (more…)

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