The Inflation Reduction Act (IRA), signed into law on August 16, 2022, includes tax provisions affecting businesses, individuals, the clean-energy industry, healthcare, and more. Let’s take a look:
Kids’ Day Camp Expenses May Qualify for a Tax Credit
Day camps are common during school vacations and the summer months. Many parents enroll their children in a day camp or pay for daycare so they can work or look for work. Unlike overnight camps, the cost of summer day camp may count towards the child and dependent care credit. Here are 10 things parents should know:
Tax Credits To Help Cover Costs of Higher Education
Whether your child attends trade school, private college, or public university, you already know that higher education in the United States is expensive. The good news is that many taxpayers are able to take advantage of two education tax credits to help offset these costs: the American opportunity tax credit and the lifetime learning credit. Taxpayers, their spouses, or their dependents who take post-high school coursework, may be eligible for this tax benefit.
What Is the Credit for Other Dependents?
The credit for other dependents is a tax credit available to taxpayers for each of their qualifying dependents who can’t be claimed for the child tax credit. The maximum credit amount is $500 for each dependent who meets certain conditions. These include:
Important Information About Economic Impact Letters
The IRS began issuing Letter 6475, Your Third Economic Impact Payment, to EIP recipients in late January. This letter helps Economic Impact Payment recipients determine if they are entitled to and should claim the recovery rebate credit on their 2021 tax returns when they file in 2022. It contains information that can reduce errors and delays and help taxpayers or tax professionals prepare their 2021 federal tax returns.
Eight Facts About the Adoption Credit
Taxpayers who adopted or started the adoption process in 2021 may qualify for the adoption credit. This credit can be applied to international, domestic private, and public foster care adoption; however, taxpayers who adopt their spouse’s child cannot claim this credit.
Tax Credits for Accommodating Disabled Workers
Businesses that make structural adaptations or other accommodations for employees or customers with disabilities may be eligible for tax credits and deductions. Let’s take a look at a few of the tax incentives that are available to encourage employers to hire qualified people with disabilities – and offset some of the costs of providing accommodations.
Tax Credit for Hiring Long-Term Unemployed Workers
With many businesses facing a tight job market, employers should know about a valuable tax credit available to them for hiring long-term unemployment recipients and other groups of workers facing significant barriers to employment. If your business is hiring right now, the Work Opportunity Tax Credit (WOTC) may help.
Tax Planning: Facts About Credits and Deductions
Tax credits and deductions can mean more money in a taxpayer’s pocket. Here are a few facts about credits and deductions that help taxpayers with their year-round tax planning:
Opting Out of the Monthly Child Tax Credit Payment
Thanks to the advance payments of the Child Tax Credit, approximately 60 million children received $15 billion in July, according to the Department of Treasury and the IRS. While many of these families will benefit from the extra money deposited into their bank accounts, some families may want to opt out and instead take the credit when they file their tax return next spring.