Donating to charities is an act of kindness that helps many individuals, organizations, and communities. It’s also a great way to reduce your taxable income, thanks to the tax charitable contributions credit.
The tax code allows taxpayers to claim a tax credit for donations made to eligible charities. It is important to note that only donations to qualified charitable organizations are eligible for a tax credit.
There are two types of charitable contribution deductions: the standard deduction and itemized deductions. The standard deduction is a set amount that the IRS allows taxpayers to deduct from their taxable income. In contrast, itemized deductions are eligible expenses that taxpayers can use to reduce their taxable income beyond the standard deduction.
If you choose to claim a tax credit for your charitable contributions, you will need to itemize your deductions on your tax return. Itemizing your deductions means that you need to maintain proper records and receipts of your donations and provide them to the IRS when you file your taxes.
It’s important to note that the amount of the tax credit depends on the amount of the donation and the taxpayer's income level. In general, taxpayers can claim a tax credit of up to 60% of their adjusted gross income (AGI) for cash donations made to eligible charities.
If your total charitable contributions exceed the 60% limit of your AGI, you can carry over the excess amount to future tax years. However, the carryover is limited to five years.
Non-cash contributions such as clothing, household items, and property can also be claimed as a tax credit. The credit amount is usually the fair market value of the donated items.
It’s also essential to keep accurate records of your charitable contributions, including receipts, canceled checks, and acknowledgment letters from the charities you donated to. You should keep these records for at least three years, as the IRS may audit your tax return and ask for proof of your donations.
In conclusion, if you are someone who loves giving back to your community, don't forget to claim your tax charitable contributions credit. It's a great way to lower your tax bill and support a good cause. However, it’s important to follow the IRS rules and keep proper records of your donations.

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Are you a homeowner paying mortgage interest on your primary residence? Did you know you may be eligible for the mortgage interest tax credit? This credit can help reduce the amount of tax you owe and increase your refund! Make sure to itemize your deductions on your tax return and consult a tax professional to determine your eligibility. Don't miss out on this valuable tax savings opportunity!

The mortgage interest tax credit is a tax credit that allows taxpayers to claim a credit for a portion of the mortgage interest they pay on their primary residence. This tax credit can reduce the amount of tax owed and increase the taxpayer's refund. The credit is calculated as a percentage of the mortgage interest paid during the tax year and is subject to certain limits. To be eligible for the mortgage interest tax credit, the taxpayer must itemize their deductions on their tax return. This tax credit is different from the mortgage interest deduction, which allows taxpayers to deduct mortgage interest from their taxable income.

However, there are certain limits and eligibility requirements that must be met in order to claim this credit.
Income Limitations The mortgage interest tax credit is subject to income limits. Taxpayers with an adjusted gross income (AGI) above a certain threshold may not be eligible for the full credit. The exact threshold depends on the taxpayer's filing status and other factors. Taxpayers should refer to IRS guidelines or consult a tax professional to determine their eligibility for the credit.
Limit on Mortgage Amount The mortgage interest tax credit is also limited to the amount of mortgage interest the taxpayer pays on their primary residence. Taxpayers cannot claim a credit for interest paid on a second home or investment property. Additionally, the credit is limited to the first $1 million of mortgage debt, meaning that if the taxpayer has a mortgage debt larger than $1 million, only the interest paid on the first $1 million is eligible for the credit.
Form 1098 The mortgage interest tax credit is claimed on the taxpayer's federal tax return, typically using Form 1098. This form is provided by the mortgage lender and shows the amount of mortgage interest the taxpayer paid during the tax year. Taxpayers should review the form carefully and make sure that the information it contains is accurate before claiming the mortgage interest tax credit on their tax return.

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If you're one of the millions of Americans with student loan debt, you know that the cost of repaying that debt can be a significant financial burden. However, there is some good news. The government offers a tax credit to help offset the cost of student loan interest: the Student Loan Interest Tax Credit.

Student Loan Interest Tax Credit: The Student Loan Interest Tax Credit is a credit available to taxpayers who have paid interest on a qualified student loan. The credit is worth up to a maximum of $2,500 and can help offset the cost of repaying student loan debt. To be eligible for the credit, the taxpayer must have paid interest on a qualified student loan during the tax year, and their modified adjusted gross income must be less than certain limits. The credit is claimed on the taxpayer's annual tax return and can result in a lower tax bill or a larger tax refund.

End of Student Loan Forbearance: In response to the COVID-19 pandemic, many borrowers have taken advantage of student loan forbearance, which allows them to temporarily suspend their loan payments. However, the end of student loan forbearance is quickly approaching, and borrowers who have taken advantage of this option will soon be required to resume their loan payments. For those who are struggling to repay their student loan debt, the Student Loan Interest Tax Credit can provide some much-needed financial relief.

Don't miss out on the opportunity to claim the Student Loan Interest Tax Credit on your tax return and get the support you need to repay your student loan debt. With the end of student loan forbearance fast approaching, now is the time to take action and make a plan to repay your loans. Remember, the earlier you start, the more manageable your debt will become, and the quicker you can get back on the path to financial stability.
Reference:
​https://www.irs.gov/taxtopics/tc456
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​As a parent or caregiver, you face many challenges when it comes to managing finances. From the cost of child care to the expenses of raising a family, it's easy to feel overwhelmed by the cost of caring for your loved ones. However, there is good news. The government provides two tax credits to help offset these costs: the Child Tax Credit and the Dependent Care Tax Credit.

Child Tax Credit: The Child Tax Credit is available to taxpayers with qualifying children under the age of 17. The credit amount for tax year 2022 is $3,000 per child, with a phase-out starting at $75,000 for single filers and $150,000 for married couples filing jointly. This credit helps offset the cost of raising children and can result in a lower tax bill or a larger tax refund.

Dependent Care Tax Credit: The Dependent Care Tax Credit is a credit available to individuals who pay for the care of a dependent so that they can work or look for work. The credit helps offset the cost of caring for dependents, such as children under age 13, disabled spouses, or other dependents who are unable to care for themselves. The credit is worth up to 35% of eligible expenses, up to a limit of $3,000 for one dependent and $6,000 for two or more dependents.

Whether you're a parent, caregiver, or both, these tax credits can help provide some much-needed financial relief. So don't miss out on the opportunity to claim these credits on your tax return and get the support you need to care for your loved ones.


Reference:
https://www.irs.gov/taxtopics/tc602

Education Tax Credits: An Overview
Paying for higher education can be a significant financial burden, but the good news is that there are several tax credits available to help offset the costs. The two main education tax credits in the US are the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). These credits can help reduce the amount of tax you owe and may even result in a tax refund. In this article, we'll go over the basics of these tax credits and their respective income limits for the 2022 tax year.

The American Opportunity Tax Credit (AOTC)
The AOTC is a tax credit worth up to $2,500 per student for their first four years of post-secondary education. This credit can be used to cover tuition, fees, and course materials, and 40% of the credit is refundable, meaning you may receive a tax refund even if you don't owe any taxes.

Income Limits for the American Opportunity Tax Credit (AOTC)
The AOTC begins to phase out for single filers with an adjusted gross income (AGI) of $80,000, and it is completely phased out at $90,000. For married couples filing jointly, the phase-out starts at $160,000 and is completely phased out at $180,000.

The Lifetime Learning Credit (LLC)
The LLC provides a tax credit worth up to $2,000 per tax return for post-secondary education expenses, including graduate and professional degree courses. Unlike the AOTC, there is no limit on the number of years you can claim the LLC.

Income Limits for the Lifetime Learning Credit (LLC)
The LLC begins to phase out for single filers with an AGI of $58,000, and it is completely phased out at $68,000. For married couples filing jointly, the phase-out starts at $116,000 and is completely phased out at $136,000.

Choosing the Right Tax Credit for Your Situation
It's important to note that you can only claim one of these credits per student per year, and you can't claim both credits for the same expenses. Additionally, both credits have income limitations, so it's important to check if you're eligible before claiming either credit. You may also want to consider factors such as the type of education you're paying for, the amount of expenses, and your tax situation to determine which credit is best for you.
In conclusion, education tax credits can help offset the costs of higher education and potentially reduce your tax bill. If you're planning on paying for post-secondary education expenses, be sure to familiarize yourself with the American Opportunity Tax Credit and the Lifetime Learning Credit, as well as their respective income limits, to determine if you're eligible.

Reference:
​https://www.irs.gov/credits-deductions/individuals/aotc#:~:text=The%20American%20opportunity%20tax%20credit,of%20%242%2C500%20per%20eligible%20student.

Standard Deduction vs. Itemizing Your Tax Return: What You Need to Know
When it comes to preparing your tax return, you have two options for reducing your taxable income: the standard deduction and itemizing. While both methods have the same goal of lowering your tax bill, they differ in how they achieve this. In this post, we'll go over the basics of each option to help you make an informed decision when filing your taxes.
Standard Deduction The standard deduction is a fixed dollar amount set by the government that you can subtract from your taxable income. This amount is the same for all taxpayers, regardless of their expenses. For the 2022 tax year, the standard deduction is $12,550 for single filers and $25,100 for married couples filing jointly. If you're 65 or older, you may be eligible for an additional standard deduction.
The standard deduction is the simpler of the two options and doesn't require you to keep track of specific expenses throughout the year. However, if your expenses don't add up to more than the standard deduction amount, you won't be able to lower your taxable income by itemizing.
Itemizing Itemizing is a method of claiming specific expenses on your tax return to reduce your taxable income. To itemize, you'll need to keep receipts and records of your expenses throughout the year. Some of the most common expenses you can itemize include:

• Mortgage interest
• State and local taxes (SALT)
• Charitable contributions
• Medical expenses
• Casualty and theft losses

If the total of your itemized expenses is greater than the standard deduction, you'll lower your taxable income by itemizing. However, if your itemized expenses are less than the standard deduction, you'll benefit more from taking the standard deduction.
Choosing the Right Option for You Whether you should choose the standard deduction or itemize depends on your individual circumstances. If you have a lot of expenses that are eligible for itemization and the total of those expenses is greater than the standard deduction, itemizing is the better option. On the other hand, if your expenses are minimal, you'll likely benefit more from taking the standard deduction.
In conclusion, understanding the standard deduction and itemizing is essential to making an informed decision when preparing your tax return. By weighing the pros and cons of each option, you can reduce your taxable income and lower your tax bill. If you're unsure which option is best for you, consider consulting a tax professional for guidance.

There are a few important changes that will be effecting many returns this year and you may see a smaller refund this year than in years past. Here are a few reasons why you may have a smaller refund. 
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For 2022, the standard deduction increased $800 to $25,900 for married couples filing jointly. For single taxpayers it increased $400 to $12,950. And for people using the head of household filing status (i.e. single parents), the standard deduction increased to $19,400, up $600 from 2021.
Stay tuned for more updates on changes in the tax law. 

We offer 4 ways to file your tax return this year.

1. In person where we schedule an appointment to come into our office.

2. Virtual where you will upload your documents to a secure file share server, we then prepare the return and we host a virtual visit to go over the documents and prepare your return.

3. Drop and Go(our most popular), you can drop off all the documents we will prepare your return and then let you know when it's all done to review.

4. Hybrid is where you can do a mix of any of the three listed above. Want to drop off documents and then do a zoom call to go over the final numbers we can do that. Or you can upload your documents on our secure file share link and then come in at a later time to discuss you final numbers. Contact us today and we can get you started any why you want.