November 22, 2020

8863 Form 2020

8863 Form 2020 welcome to the tax lair Pro income tax preparation course we're continuing on with module 12 this is part two of tax credits we're looking at the non refundable. Credits lines 48 through 55 on the new schedule 3 of the form 1040 first let's, look at the retirement savings contribution credit individuals or taxpayers who save for retirement may qualify for.

A federal tax credit the retirement savings contribution credit or otherwise known as the savers credit is a federal tax credit that's designed to encourage low and modest income individuals to. Save for retirement taxpayers who contributed to a retirement plan or an IRA, may be eligible for the non-refundable retirement savings contributions credit and remember we discussed this in, the last module a non-refundable credit simply goes to offset taxes the trigger for the retirement savings contribution credit or the savers credit can sometimes be the taxpayers form w2 for amounts that are listed in boxes 12. And 14 the percentage of contributions received.

As a tax credit is 10 20 or 50 percent depending on the taxpayers. Adjusted gross income the savers credit can be taken for contributions to a traditional IRA a Roth IRA or a 401k plan now to qualify for the savers credit the taxpayer must meet the income criteria must, contribute money to a retirement plan we just saw that the taxpayer is not a full-time student and the taxpayer is, age 18 or older.

And the taxpayer is not claimed as a dependent on another tax return for 2018 the income limits, for the savers credit depends on the taxpayers filing status 31 5 or less for single married filing separately in a qualifying widow or widower 47 to 54 head of household and 63,000 on a joint return. The maximum credit a.

Taxpayer can claim phases out as the income increases the maximum credit or the dollar amount of the savers credit is. $1,000 for unmarried filers and 2000 for married filers now many eligible taxpayers oddly enough don't take advantage of this. Tax break because they simply don't know about it a recent survey shows that only 12% of American workers with annual household incomes of less than $50,000 or even aware.

Of the savers credit so how do you claim it how. Do we claim the savers credit on the tax return to claim the credit we use form 8880 the credit for qualified retirement savings contributions the, credit then transfers from form 8880 to line 51 of the new schedule 3 and then. Finally to line 12 of the form 1040 and next one of the biggies for 2018 the child tax credit, if the taxpayer has children who are under 17 at the end of the tax year and who have valid social security numbers then the taxpayer can claim the child tax credit for 2018, and get a $2,000 tax, credit per child this is doubled from 2017 now remember the child must be under the age 17 for the entire year the child tax credit which was created by the Bush tax cuts was set, to, expire at the end of 2012 however if you remember your history the fiscal cliff deal that was signed on January the 3rd 2013 extended the current child tax credit for, the next five years so what's new for 2018 to claim the child tax credit. Or the CTC or the additional child tax credit the a CTC qualifying child must have a social security number and again the. Maximum amount.

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