Day _17 ACIS3314 Spring 2011 Credits

Day _17 ACIS3314 Spring 2011 Credits - ACIS 3314, Cloyd,...

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Unformatted text preview: ACIS 3314, Cloyd, Day 17 1 1 Tax Credits & Payments ACIS 3314 Tax Impact on Decisions Learning Objectives • Describe the three categories of tax credits • Compute the allowable… – Child & Dependent Care Credit – American Opportunity Credit – Making Work Pay (2010) vs. Reduced FICA withholding (2011) • Explain taxpayer filing & tax payment requirements Tax Credits • Reduce tax liability dollar-for-dollar • Three categories ACIS 3314, Cloyd, Day 17 2 4 Nonrefundable Credits Refundable Credits Excess Business Credits • If business credit exceeds tax… – Carry back 1 year, then… – Carry forward 20 years • Foreign tax credit (FTC) – Hybrid business and personal – Nonrefundable – If FTC exceeds tax… • Carry back one year, then… • Carry forward 10 years N-R Personal: Child Tax Credit • $1,000 for each qualifying child under age 17 at end of year • Phase-out is $50 of total credit for each $1,000 ( or fraction thereof ) of AGI above threshold (MFJ threshold = $110,000). • Partially refundable: Lesser o f (1) unclaimed credit or (2) 15% of earned income in excess of $3,000. ACIS 3314, Cloyd, Day 17 3 CTC Tax Expenditure by Income 7 JCT Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014, p. 58....
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This note was uploaded on 08/22/2011 for the course ACIS 3314 taught by Professor Hicks during the Spring '09 term at Virginia Tech.

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Day _17 ACIS3314 Spring 2011 Credits - ACIS 3314, Cloyd,...

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