Ind. Inc. Tax: Credits and Other Tax Topics

Question 1

How much of their payments for child care can parents utilize for 2+ children?

Answer 1

Up to $6,000 of their payments as long as they were needed for employment.

Question 2

levels of child care credit based on income

Answer 2

1. At $15k or less, 35% credit.

2. At $43k or more, only 20%.

Question 3

How to do child care credit problem

Answer 3

1. Figure out max amount of payments that can be utilized for such a problem and multiply that by appropriate credit rate based on income.

Question 4

Which income tax credit is refundable- can generate a refund even if no tax payments have been made by the taxpayer?

Answer 4

EIC.

Question 5

How long can the American Opportunity Credit be taken?

Answer 5

For the first four years of post-secondary education.

Question 6

How is an foreign tax handled for tax purposes?

Answer 6

It can be taken as a tax credit or as an itemized deduction.

Question 7

How are excess soc. sec. payments handled for tax purposes?

Answer 7

The taxpayer can take a credit on the fed. tax return equal to the amount of excess payments.