A non-refundable tax credit is a tax credit that can only be used to offset tax liability. It cannot be refunded if the tax liability is less than the credit. This type of tax credit is generally used to encourage certain types of behavior, such as investing in certain types of businesses or undertaking energy-efficient … Read more
. IRS Publication 503: Child and Dependent Care Expenses This publication from the Internal Revenue Service (IRS) provides information on what expenses are considered eligible for the child and dependent care tax credit. What are examples of child care expenses? There are many examples of child care expenses, but they can generally be divided into … Read more
“IRS Publication 501 is the Internal Revenue Service’s official publication for tax-exempt organizations. It provides guidance on how to establish and maintain tax-exempt status, and outlines the requirements for filing annual tax returns. The publication also includes definitions of terms used in the tax code, such as “charitable organization,” “public charity,” and “private foundation.” These … Read more
The term “phase out” is used to describe a gradual reduction in the amount of a tax deduction or credit. This can happen over time, or it can be triggered by certain income levels. For example, the Child Tax Credit begins to phase out for families with incomes above a certain threshold. This means that … Read more
A “tax shield” is an expense that can be used to reduce taxable income. The most common type of tax shield is a deduction, which lowers the amount of income that is subject to tax. Other types of tax shields include tax-exempt income, tax-deferred income, and tax credits. Are dividends tax-deductible? There is no definitive … Read more
A tax-exempt security is a financial security that is exempt from taxation. This means that the investor does not have to pay taxes on any income or capital gains earned from the security. Tax-exempt securities are typically issued by government entities, such as municipalities, to finance public projects. The interest paid on these securities is … Read more
The Modified Accelerated Cost Recovery System (MACRS) is the current system used by the Internal Revenue Service (IRS) to depreciate property for federal income tax purposes in the United States. MACRS consists of a set of depreciation rates that are used to determine the amount of depreciation that can be claimed on an asset each … Read more
The Annual Investment Allowance (AIA) is a tax deduction that can be claimed by businesses on certain types of investment. This includes plant and machinery, vehicles, tools, office equipment and other business assets. The AIA allows businesses to deduct the cost of these assets from their taxable profits, which can reduce their tax bill. The … Read more
Application for Tentative Refund (Form 1045) What do I include with Form 1045? When you file Form 1045, you must include the following: 1. A completed and signed Form 1045. 2. All required attachments, including: a. A completed and signed Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return. b. A completed … Read more
The Unified Tax Credit Definition is the term used to describe the tax deduction or credit that is available to a taxpayer who meets the requirements for the deduction or credit. The deduction or credit is available to the taxpayer who files a tax return with the IRS and is available to be claimed on … Read more
