Notice : Credits as well as Tax laws are consistently changing! You can check here routinely for more information and updates!

 

Credits are defined as an amount of money that can be offset against a tax liability. Eligibility varies based on dependent age, annual income and more factors per credit. 

 

Entrepreneurs/Self Employed 

Although there are no direct credits given to help Entrepreneurs/ Self Employed  this year, there are still ways to maximize your return. 1.) If you have an in home office/business space , 2.) If you paid booth rental, 3.)If you paid for products/equipment for your business, 4.) If you invested more in your business than you received or barely made profits, 5.) if you travel for your work!

 

Performers/Artist/OF & Adult Content Creators 

Although there are no credits given to help Entrepreneurs/ Self Employed  this year, there are still ways to maximize your return. If you are a dancer, performer, artist etc and you were paid for freelance work for a minimum of $200 per performance/session and your adjusted gross income is not more than $16,000 before deducting expenses, 

there are ways to claim your expenses like studio time, hair/makeup, vocal lessons/trainer, travel and more to maximize your refund. 

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CREDITS FOR DEPENDENTS

 

The child tax credit is available to those with qualifying dependents and is worth up to $2,000 per qualifying dependent child under 17 years of age! The refundable portion is worth up to $1,700. (As of 11/20/24)

 

Taxpayers with dependents who don't qualify for the Child Tax Credit may be able to claim the Credit for Other Dependents. The maximum credit amount is $500 for each dependent who meets certain conditions. Dependents can be of any age, even 18 or older. However you must be able to provide proof that they live with you and that you are responsible for their care.

 

Want to know if you qualify for the CTC or COD? Visit https://www.irs.gov/help/ita/does-my-childdependent-qualify-for-the-child-tax-credit-or-the-credit-for-other-dependents.

 

CREDITS FOR WORKING

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The earned income tax credit is given to those who have earned income and met certain AGI & Credit limits in the past. 

• No qualifying children: $649

• 1 qualifying child: $4,328

• 2 qualifying children: $7,152

• 3 or more qualifying children: $8,046

 

Want to know if you qualify?

Visit https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

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CREDITS FOR STUDENTS

 

Education credits help with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two different credits available!

 

The American opportunity tax credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. You can get a maximum annual credit of $2,500 per eligible student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you.

 

Qualifications include : 

• Be pursuing a degree or other recognized education credential,

• Be enrolled at least half time for at least one academic period* beginning in the tax year,

• Not have finished the first four years of higher education at the beginning of the tax year,

• Not have claimed the AOTC or the former Hope credit for more than four tax years, or

• Not have a felony drug conviction at the end of the tax year.

 

The lifetime learning credit (LLC) is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses — including courses to acquire or improve job skills. There is no limit on the number of years you can claim the credit. It is worth up to $2,000 per tax return.

 

Want to know if you qualify for the AOTC or the LLC? Visit https://www.irs.gov/help/ita/am-i-eligible-to-claim-an-education-credit!

 

CREDITS FOR CLEAN VEHICLE PURCHASES 

You may qualify for the New Clean Vehicle Tax Credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). There are limitations based on income, car type, cost and purchase date. The vehicle must have been purchased in the last 12 months.

 

Want to know if your car qualifies for the NCVTC ? Visit https://fueleconomy.gov/feg/tax2023.shtm

 

You may qualify for the Used Clean Vehicle Tax Credit for buying a previously owned, qualified plug-in electric vehicle (EV) or fuel cell vehicle (FCV), including cars and light trucks, from a licensed dealer for $25,000 or less. The credit equals 30% of the sale price up to a maximum credit of $4,000. There are limitations based on income, car type, vehicle weight, cost, purchase date and relationship to seller. The vehicle must have been purchased in the last 12 months.

 

Want to know if your car qualifies for the UCVC?  Visit https://fueleconomy.gov/feg/tax2023.shtml

 

Businesses and tax-exempt organizations that buy a qualified commercial clean vehicle may qualify for a clean vehicle tax credit of up to $40,000 under Internal Revenue Code (IRC) 45W.

Please visit https://www.irs.gov/credits-deductions/commercial-clean-vehicle-credit for more information.

CREDITS FOR ENERGY EFFICIENT HOMES

The Energy Efficient Home Improvement Credit is available to those homeowners and renters in certain situations who have made energy efficient upgrades to their home such as : 

• Exterior doors, windows, skylights and insulation materials

• Central air conditioners, water heaters, furnaces, boilers and heat pumps

• Biomass stoves and boilers

• Home energy audits

 

Want to know if your home improvements qualify? Visit https://www.energy.gov/policy/articles/making-our-homes-more-efficient-clean-energy-tax-credits-consumers (As of July 2024)

 

If you invest in renewable energy for your home such as solar, wind, geothermal, fuel cells or battery storage technology, you may qualify for an annual Residential Clean Energy Credit

Examples are: 

• Solar, wind and geothermal power generation

• Solar water heaters

• Fuel cells

• Battery storage (beginning in 2023)

 

Notice : If you use a property solely for business purposes, you can't claim the credit.

If you use your home partly for business, the maximum available credit for eligible clean energy expenses is as follows:

• Business use up to 20%: full credit

• Business use more than 20%: credit based on share of expenses allocable to nonbusiness use

Learn More : https://www.irs.gov/credits-deductions/frequently-asked-questions-about-energy-efficient-home-improvements-and-residential-clean-energy-property-credits-qualifying-residence

 

NOTICE: There are plenty more credits available for contractors of energy efficient homes, employers of marginalized groups, businesses that provide childcare to their employees, teachers and so much more! I personally encourage all of my clients to share information related to their business, vehicle purchases, home upgrades and more to ensure we have claimed all the necessary credits for you in an effort to maximize your return! As your filing preparer I am obligated to provide you with a full list of possible credits when requested and to ask the necessary questions and request documentation for proof of credits claimed.