Capital losses that exceed capital gains for the year may be used to offset normal taxable income of up to $3,000 in any tax year.
Net capital losses in excess of $3,000 can be carried forward indefinitely until the amount is depleted.
Due to the IRS fictitious sale rule, investors must be careful not to repurchase any shares sold at a loss within 30 days or the capital loss is not eligible for preferential tax treatment.
The American Opportunity Tax Credit (AOTC) helps offset the cost of post-secondary education for students or their parents (if the student is a dependent).
Deductible taxes are expenses that a taxpayer or business can deduct from their adjusted gross income, which reduces their income, thereby reducing the total tax they must pay.
The Earned Income Tax Credit (EITC) is a refundable tax credit used to supplement the wages of low-income workers and help offset the impact of Social Security taxes.
As a result of the Tax Cuts and Jobs Act (TCJA), most taxpayers can now only carry forward net operating losses (NOLs) that occur in tax years after 2017 to a later year.
Form 4684 is the U.S. Internal Revenue Service (IRS) form for reporting profits or losses from accidents and thefts that occur as a result of a federally declared natural disaster that may be deductible for taxpayers who detail deductions.