Alimony is the amount associated with divorce . A painful arrangement , but that is a fact of life. Another fact is that the IRS desires its share out of such money received by you .In other words alimony is taxable income in recipient’s hand. At the same time, the payment of alimony is also deductible for the person paying . Yes, the amounts paid under divorce or separate maintenance decrees or written separation agreements entered into between you and your spouse or former spouse are considered alimony.However Internal Revenue Code provides a number of condition that must be consulted before you can claim the payment for separation as deduction from taxable income of the tax year.
In orde to claim education credit or deduction, one of the most important condition is that the exepnse on education should be within the Qualified Education Expense defined under Internal Revenue Code. So what does the term Qualified Educational Expense mean ? Generally , a qualified education expenses are amounts paid for tuition, fees and other related expenses for an eligible student.A close examination reveal that there are many conditions that needs to be satisfied before one can claim an expense for the purpose of educational credit. So here are five frequently asked questions which will cover almost all the necessary issues related to qualified educational expense.
As per Internal Revenue Code , one can claim educational credit called American Opportunity Tax Credit or AOTC . This educational credit is allowed to a taxpayer for incurring qualified education expenses paid for an eligible student.
Under US Tax code , a tax payer gets tax exemption , deductions and tax credits for the qualified dependents. for example , you may have qualified child dependents or parents who are claimed as dependent in your return. They may have independent source of income i.e they may have earned income or unearned income . As per 26 US Code , the claim of tax relief on account of dependent in your return also enjoins upon the dependent to check if filing of tax return is obligatory under the law. Internal Revenue Code provides different parameters for -single dependents and married dependents- deciding about the condition of filing tax return by them.
Internal Revenue Code not only provides you personal exemption to all individual tax payer , but additional personal exemption for all dependents- qualifying child or relatives or even non-relatives- are also allowed provided you fulfill the conditions for such claim.So ,here are the check list of conditions you must fulfill if you desire to claim anyone as dependent.
Child and Dependent Care Credit are part of tax credits which you can utilize to reduce the tax payable for a tax year. As you must be aware that while tax deductions and tax exemptions reduces your taxable income , the tax credit directly reduces the tax payable . So , it is quite advantageous to get tax credits. There are many types of tax credits available , but this post is devoted to tax credit you can enjoy for certain types of expense on child and dependents’ care.
A qualifying child will entitle you tax tax exemption and also tax deduction . One tax exemption for one qualifying child . Further , Internal Revenue Code provides other benefits if you have qualifying child dependents . for example , you can chose filing status as Head of Household or claim the Child Tax Credit, or the Credit for Child and Dependent Care Expenses or a higher Earned Income Credit, etc . These extras are certainly requires extra rules to fulfill .
The very basic question haunts almost every first time earners of income – do I need to file tax return ? Yea, it is true that under the US tax law , filing of tax return is as important as paying taxes . But , the Internal Revenue Code does not make necessary to file tax return for every types of taxpayer . While one of the basic criteria for filing tax return is earning of income , it is not so for all kinds of tax payers . Whether there is legal requirements for filing tax return, depends on the whether you are –
- An individual
- A dependent person on some one
- You are below 19 years college going or full time students
- Self employed persons
- Person who is an alien or non-citizen of USA .