You are reading

Tax Deductions are Virtually Gone but Tax Credits Are Alive and Well

March 1, 2019  Sponsored Story By Will DeJesus CPA, CIA, CISA
CEO and Co-Founder TaxTerminal.com Inc.in LIC

The tax code continues to evolve and this year the big change deals with deductions.

Recent tax reforms have eliminated several deductions, including deductions for moving expenses, tax preparation services and legal fees. In addition, the ceiling for allowable home interest deductions has been reduced to $750,000, down from $1 million.

What does this mean?  It means that if you own a home or are looking to purchase a home and obtain a mortgage of $750,000 or less, you will be able to “write off” all of the interest associated with that mortgage. However, if you have a mortgage above $750,000, then that portion of the interest will no longer be deductible.

The number and amount of “deductions” that can be taken this year has been cut right back. However, filers should focus on available “tax credits,” which offer so much more.

Tax deductions work by reducing the final income that is subject to tax–thereby reducing the amount owed to the IRS. Tax credits, however, provide a one for one reduction in your tax liability. For example, if you qualify for a $100 tax credit, it reduces your final tax bill by $100.

Here are some personal and business tax credits that are available:

Personal Tax Credits:

Adoption Expense Credit – Form 8839
Child Tax Credit & Other Dependent – Forms 2441, 8812
Education Credits – Form 8863
Residential Energy Efficient Property Credit – Form 5695
Retirement Savings Contribution Credit – 8880
Plug In Electrical Vehicle Credit – Form 8936
Earned Income Credit – Form EIC IRC 32

Business Tax Credits:

The General Business Credit – Form 3800
Small Employer Health Insurance Premiums Credit – Form 8941
Credit for Employer Provided Child Care Facilities – Form 8882
Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips – Form 8846
Credit for Small Employer Pension Plan Startup Costs – Form 8881
Work Opportunity Tax Credit – Form 5884
Employer Credit for Paid Family Leave & Medical Leave – Form 8994
Credit for increasing Research Activity – Form 6765

It pays to know your tax credits!

email the author: news@queenspost.com
No comments yet

Leave a Comment
Reply to this Comment

All comments are subject to moderation before being posted.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Recent News

East Elmhurst senior arrested for stalking 12-year-old girl in broad daylight: NYPD

Police from the 115th Precinct in Jackson Heights did not have far to go to locate a senior who allegedly stalked a 12-year-old girl in broad daylight in East Elmhurst.

At approximately 3:30 p.m. on Monday, Jan. 6, a bearded older man approached a young girl as she walked along 81st Street near 31st Avenue. He grabbed her hand, but the girl managed to pull away. Undeterred, the man followed her and grabbed her hand a second time before eventually heading north on 81st Street, according to police. The girl was not injured during the incident.