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Can I claim an education credit?
Contributed by: Tess, FreeTaxUSA Agent Covering the cost of higher education can be challenging, but tax credits like the American Opportunity Tax Credit and the Lifetime Learning Credit may offer meaningful financial relief. Whether you're a student yourself or supporting a student dependent, the IRS provides valuable…
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Can I claim the Earned Income Tax Credit if I was incarcerated?
Contributed by AnthonyS FreeTaxUSA Agent Tax Pro 💡Disclaimer: FreeTaxUSA software DOES NOT currently support this filing situation. “I spent part of last year in a work-release program — can I still get the Earned Income Tax Credit?" This is a common question for those who were incarcerated or in transitional programs like…
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How to confirm the charity you want to contribute to is a qualified 501(c)(3) and eligible for a deduction
Contributed by: AnthonyS, FreeTaxUSA Agent, Tax Pro Have you ever donated to a charity only to later realize that it wasn't tax-deductible? I have, and it's frustrating -- especially if you’re counting on that deduction to lower your tax bill. This article will guide you through how to verify an organization’s tax-exempt…
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Can I contribute to both an SEP-IRA or 401(k) and a traditional IRA, and claim deductions for both?
Contributed by: AnthonyS, FreeTaxUSA Agent, Tax Pro If you’re self-employed or have access to a workplace retirement plan and you’re thinking about maxing out your retirement savings, you might wonder: Can I contribute to both a traditional IRA and an SEP-IRA or 401(k), and deduct both on my taxes? The short answer is yes…
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How does the EITC work? Why does the amount decrease?
Contributed by KiaraB, FreeTaxUSA Agent TaxPro As FreeTaxUSA support agents, we often get asked questions like, “Why am I not getting the EITC?” and “Why did the Earned Income Tax Credit go down when I had more income?” Here is a simple explanation so you can understand how the Earned Income Tax Credit (EITC or EIC) works.…
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How Do I Report a Backdoor Roth (2024 and later)?
Contributed by: RachelR, FreeTaxUSA Agent, Tax Pro There are two different types of Individual Retirement Accounts (IRAs) – Traditional and Roth. With a Traditional IRA, you'll usually qualify to get a tax deduction in the current year for any IRA contributions you make during the year. When you retire and begin using the…
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IRA recharacterization vs. conversion: key differences
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro Understanding the difference between an IRA recharacterization and an IRA conversion can be a bit tricky. While they might seem similar, it's important to know how they differ. The way these transactions are reported on your tax return can vary significantly and might impact…
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What are qualified education expenses for claiming an education credit?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro Paying for higher education can be expensive — but claiming education credits, such as the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC), may provide some relief. Whether you’re a student or have a student dependent, the IRS offers valuable…
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How do Health Savings Accounts and excess contributions impact taxes?
Contributed by: TriciaD, FreeTaxUSA Agent, Tax Pro Health Saving Accounts (HSAs) are popular for managing healthcare costs with tax benefits. Taxpayers with high-deductible health plans (HDHPs) can contribute pre-tax money to an HSA for qualified medical expenses. However, annual IRS contribution limits apply (plus…
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Am I eligible for the Earned Income Tax Credit (EITC)?
Contributed by: WrenD, FreeTaxUSA Agent, Tax Pro If you're working and earning a low to moderate income, the Earned Income Tax Credit (EITC) could put money back in your pocket. It's a valuable tax credit designed to help working individuals and families, but the rules can be a little confusing. In this article, we’ll walk…