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

Crunching the Queens crime numbers: grand larcenies down across borough, rapes halved in the north, robberies decrease in the south

Apr. 17, 2024 By Ethan Marshall

The number of grand larcenies across Queens was down during the 28-day period from March 18 to April 14, compared to the same period of time last year, according to the latest crime stats released by the NYPD Monday. At the same time, rapes and robberies decreased significantly in northern and southern Queens, respectively.

Op-ed: An urgent call for revising NY’s criminal justice reforms to protect public safety

Apr. 11, 2024 By Council Member Robert Holden

In 2019, the State Legislature and Governor Andrew Cuomo embarked on a controversial overhaul of New York’s criminal justice system by enacting several laws, including cashless bail and sweeping changes to discovery laws. Simultaneously, the New York City Council passed laws that compounded these challenges, notably the elimination of punitive segregation in city jails and qualified immunity for police officers. These actions have collectively undermined public safety and constrained law enforcement effectiveness.