The single tax deduction provides a set dollar amount that an individual can give over a lifetime and pass on to heirs before any gift or inheritance taxes apply.
The tax credit combines gift and estate taxes into one tax system that reduces an individual’s or estate’s tax bill, dollar by dollar.
The lifetime gift and property tax exemption for 2022 is $12.06 million for individuals and $24.12 million for married couples filing a joint return.
In tax year 2022, you can give up to $16,000 ($32,000 for “split” spouse gifts) tax-free to any number of recipients, using no lifetime gifts, and exemption from inheritance tax.
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.