The increased child tax and earned income credits and the expanded education credits have been extended for five years.
Specifically, the President would make permanent the expanded American Opportunity and Earned Income credits and extend through 2016 the current exclusion from taxable income for cancellation of indebtedness recognized on a primary residence.
Obama-Era Tax Cuts: on January 1, 2013, several provisions that benefit the lower classes most notably the increased child tax and earned income credits and the expanded education credits are slated to expire.
FORBES: Fiscal Cliff Debate Continues, But The Tax Decisions Appear To Have Been Settled
At the time, much of the focus was on how refundable credits for low-income families, such as the earned income and child credits, wipe out the income tax bills of many.
Programs such as Earned Income Tax Credits of the United States help the poor who actually work.
The overhaul--separate from the AMT fix--would increase standard deductions, double earned income tax credits for some and lower the top corporate marginal tax rate from 35% to 30.5%.
Low-earners are helped most by those refundable credits, such as the earned income and child credits.
These tax breaks include everything from earned income and child credits to deductions for mortgage interest and charitable gifts to exclusions for employer-sponsored health insurance and retirement savings.
Keep the earned income and child tax credits.
FORBES: Days Before Sequester, Bowles and Simpson Offer A Second Plan For Fiscal Sustainability
You may not itemize deductions on a form 1040-A. You may claim some credits using the form 1040-A, including the child tax credit, education credits, earned income credit, credit for child and dependent care expenses, credit for the elderly or the disabled and the American Opportunity Credit.
FORBES: A Beginner's Guide To Taxes: Which Tax Form Should I File?
In contrast, the existing tax system would likely be better for moderate-income households, mainly because of its system of credits such as the earned-income credit and the child credit that provide cash even to people who don't owe any income taxes.
The oldest and biggest of the refundable credits the earned income tax credit has been caught for years in a cycle of expansions, crackdowns and delays.
FORBES: Blame Congress, As Well As H&R Block And IRS, For College Tax Credit Mess
The Senate budget would also cut taxes a bit by extending relatively generous rules for refundable credits such as the earned income and child tax credit.
FORBES: Senate Budget's Bad Math: Axing Tax Breaks For Rich, Big Business Isn't Enough
The researchers, who sampled one in every 5, 000 returns filed with the Internal Revenue Service, found that the tax system, with its progressive rates and refundable tax credits the earned income credit for the working poor and the child tax credit does reduce income inequality.
FORBES: New Study Using IRS Tax Data Shows Rich Are Staying Richer, Poor Poorer
Repeal tax credits, such as the Earned Income Tax Credit and the Child Tax Credit.
Additionally, your available credits are limited to the earned income credit or the nontaxable combat pay election.
FORBES: A Beginner's Guide To Taxes: Which Tax Form Should I File?
This proposal would eliminate all deductions, credits and exclusions except for the earned income credit and child credit, sharply reduce income tax rates, and continue to exclude employee benefits from payroll tax.
FORBES: Washington Plays The Baseline Game On Deficit Reduction
Those include, for example, expansions of existing credits such as the child tax credit, the earned income tax credit (EITC) and the American Opportunity Credit (the souped up version of the Hope Credit).
Also extended for five years (not permanently) are number of individual tax credits including the child tax credit, the controversial earned income tax credit (EITC), and the American Opportunity Tax credit (the souped up version of the Hope Credit).
Workers employed for part of a year might have income low enough to qualify for credits and deductions they formerly earned too much to take, Mr. Charney says.
Among them are tax credits for families of modest means, including one for college tuition, and an expanded earned income tax credit, which provides cash to working poor families who don't earn enough to pay income taxes.
应用推荐