American Tax Service

Helping Americans File Their Taxes

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What You Need to Know about the New Child Tax Credit

The original child tax credit, known as the CTC, was first introduced back in 1997, before becoming available to claim in 1998. In the beginning, this was a simple nonrefundable credit for $400, which applied to each qualifying child if they were under the age of 17.

child tax credit

There have been many changes over the last 20 years, with qualifying children being worth a tax credit of $1000 per child. This was refundable for taxpayers who had at least $3,000 of earned income.… Read the rest

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New Tax Refund and Reform Calculator at H&R Block Online

The major tax law changes implemented and the Tax Cuts and Jobs Act (TCJA) has a lot of people worried about what it could mean for their taxes. People have a lot of questions, but we can help prepare you for the things that lie ahead.

tax refund reform calculator

To provide a range of useful tools to their clients, H&R Block has unveiled a brand new feature to help taxpayers understand the impact of the recent tax reform.

You’ll be able to find out your new tax liability.… Read the rest

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How to Get a Fast Tax Refund Date

A tax refund can go a long way in changing the life of its receiver, whether it is saving or paying debts. In fact, in 2018, the total tax refund amount was approximately $2800 for almost 75% of taxpayers receiving a tax refund. So, how to do you get your tax refund faster?

The recommended way is to efile and use direct deposit to get the fastest tax refund.

tax refund dateDuring the last tax season, 58% of taxpayers received their tax refunds through this method.… Read the rest

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IRS Tax Forms You May Need to File

If you are planning to paper file, you should know that the IRS no longer sends your paper tax packages in the mail.

1040 tax form

If you file your taxes with H&R Block Online, you will find that it is super easy when it comes to getting the right tax form.

This is because the online tax software automatically selects the form that is the best fit for your unique tax situation.

Alternatively, you can order the forms and have them sent to you in the mail by calling the IRS, 1-800-TAX-FORM.… Read the rest

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Tax Credits for Solar Energy

One of the most valuable tax credits available to homes and businesses is the solar energy tax credit. It’s a tax credit that applies to solar-powered hot water and panel systems. It’s worth up to 30% of the total cost of purchase and installation.

At the end of the year 2015, Congress extended this credit for four years. That means it’s currently possible for you to claim the solar tax credit until the end of 2019 in its current form. It will gradually phase out until 2022 when homeowners can no longer claim it, and it’s only worth 10% to businesses.… Read the rest

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Tax Deductions For Mortgage Refinancing

mortgage interest tax deduction

The largest tax deduction most people can claim on any type of mortgage is on the interest paid on the loan.

In most cases, mortgage refinance interest is tax-deductible, which means you can take it off your taxable income for that tax year.

But there are rules that apply.

Rules for Making Tax Deductions on Mortgage Interest

First of all, the loan must be on either your primary residence or a secondary residence. If you are taking the deduction on a second residence, this can’t be a rental property.… Read the rest

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Tax Credits for New Home Construction

Are you building a new home?

There are tax breaks available for people in this situation. They come in the form of tax deductions and tax credits. A credit is used to reduce the amount you pay, and a deduction reduces your total taxable income.

Here are some of the tax write-offs available to you now.

Did You Pay Interest on a Construction Loan?

new home construction

If you took out a construction loan to build your home, then chances are you paid interest on that loan.… Read the rest

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The IRS Form 1040A Explained

Form 1040A is one of the forms that can be used when filing federal taxes in the US. This form is shorter than the original 1040 form; however, it is more complex than the 1040EZ form. All taxpayers can use form 1040, yet there are restrictions as to which taxpayers can use Form 1040A.

For example, you have to have a taxable income of less than $100,000; you have to take the standard deduction instead of itemizing your deductions.

Filing Status & Exemptions

When preparing this form, you have to list your exemptions and select a filing status before you start reporting your income.… Read the rest

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Self-Employed Tax Deductions That Save You Money

self employed tax deductionsFreelancers, contract employees, and business owners know that taxes can be a financial make or break. Tax season is normally a period filled with dread as you try to justify costs and scratch together last-minute work to prepare for the worst.

Thankfully, there are many ways you can save money if you are self-employed.

Of course, you can only make the most of these self-employed tax deductions if you know what they are. You’ve probably spent most of the year stressing about the taxman taking your hard-earned money, but the truth is that you’ve earned the right to claim the self-employed tax deductions that come with having your own business.… Read the rest

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What is IRS Form W-4 and How to Fill it Out

 

w4 withholdings formIRS Form W-4 is a necessary form for changing your withholding limits. Withholding is when your employer will keep a portion of your paycheck for the purposes of using it to pay your tax bill at the end of the year.

Smart taxpayers will take advantage of the W4 withholding calculator to ensure they don’t get hit with a large tax bill they can’t pay the following spring.

Here’s what you need to know about Form W-4.

What is Form W-4 in a Nutshell?

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Best Education Tax Credits

Education tax credits are an easy way to help cover some of the costs of education. If one of your dependents is a student, you’ll be able to take advantage of one of two educational tax credits available for this upcoming tax year.

education tax credits

They’re much better for savings than a standard deduction in tuition costs. Credits cut your tax bill dollar-for-dollar. So, if you’re want to claim education tax credits, read about them and see which credit offers the best savings for you.… Read the rest

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2020 Tax Refund Schedule Dates

What are the 2020 Tax Refund Schedule Dates?

Find out what the IRS tax refund schedule dates are this year.The IRS tax refund schedule dates according to the IRS are 21 days for e-filed tax returns and 6 to 8 weeks for paper returns.

So, in theory, if you e-file your tax return, on the starting day of January 27th, 2020, you should receive your tax refund by February 16th or a paper check between March 9th and March 23rd.

When Can You Expect to Receive Your Tax Refund?

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New H&R Block Tax Software Features Available

There are several new additions to the H&R Block software being released this year, including the “drag and drop” feature to easily import relevant tax information into the software from a range of sources.

What New Features Are Available With H&R Block?

This coming tax year, taxpayers are going to have the option of using the “drag and drop” feature. Users will be able to use this new feature to import their tax returns from the previous year into H&R Block.… Read the rest

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Federal Tax Deductions for Home Renovation

Tax Deductions for Home RenovationThere are many strategies to use house remodeling and upgrades to reduce your taxes.

Remodeling of your house is not usually a cost that can be deducted from your federal income taxes. However, there are many techniques that you can utilize for home remodeling and upgrades to decrease your taxes. This includes both tax breaks and tax incentives for remodeling and enhancements made to your house, either when you bought the home or after.

Making Use of Your Mortgage to Make Property Upgrades

A good way to reduce the expenses of home remodeling would be to make the upgrades to the residence when it is purchased.… Read the rest

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The Child Tax Credit & Additional Child Tax Credit

One of the most beneficial and popular federal tax credits is the Child Tax Credit. This is a nonrefundable tax credit, and it’s worth up to $2,000 per qualifying child.

Who is Considered a Qualifying Child?

child tax credit additionalThe IRS considers a qualifying child to be a child that meets all of the criteria below:

  • Under the age of 17 at the end of the year
  • Has resided with you for more than half of the year
  • Is your dependent on your federal taxes
  • Is a US citizen and has a valid SSN
  • Is a relative such as your child, sibling, stepchild, stepsibling, foster child, legally adopted child, or a descendant from any of the previously mentioned individuals.
Read the rest

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Home Energy Tax Credits

Tax season is going to be here before you know it. Therefore, now is the time to make sure that you have made all of the energy-efficient upgrades to your home.

By having an energy efficient home, you will save money on your bills and pay less money in taxes. Learn how you claim home energy tax credits if you qualify.

Non-Business Energy Property Credit

home energy tax creditsYou can get a 10% credit for your energy efficient improvements. Things that fall under this category include:

  • Water heaters
  • Electric heat pumps
  • Central air conditioners
  • Natural gas, propane, or oil water heaters
  • Qualified oil furnaces
  • Qualified oil hot water boilers
  • Some air circulating fans
  • Insulation that reduced heat loss or gains
  • Exterior windows, skylights or doors
  • Storm windows and doors
  • Solar panels
  • Metal and asphalt roofs that reduce heat loss or gain

Residential Energy Efficient Property Credit

This energy tax credit will allow you to have a 30% credit for the alternative energy equipment that you have had installed.… Read the rest

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Rental Property Tax Deduction

Deciding to become a landlord can be extremely beneficial for yourental home financially. However, it also comes with a significant amount of work.

As well as the general responsibilities associated with running a rental property, you need to find tenants, pay all your expenses, and ensure you have insurance.

In personal tax terms, renting out a property can complicate the situation. There are rental property tax deductions available to help you out with running your business, though.

Different deductions are available from the IRS.… Read the rest

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How the Student Loan Interest Tax Deduction Works

Student loan interest can quickly add up. That’s why the Federal government introduced the student loan interest tax deduction to help ordinary students out. If you made interest rate payments on your student loans during the tax year, you can deduct up to $2,500 in interest paid.

student loan interest tax deduction

If you happen to qualify for the 22% tax rate, you have the best deal because your maximum deduction is $550. A few hundred dollars in your wallet for doing very little sounds great, so how can you make sure that you claim the maximum deduction amount available to you?… Read the rest

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How Much Do You Get Back in Taxes for a Child?

how much do I get back in taxes for a child

The entire tax code was reformed under President Trump’s Tax Cuts and Jobs Act (TCJA). The TCJA has changed many things about the Child Tax Credit. These new rules apply to the new tax season.

How Much do I Get Back for a Child?

Under the TCJA, the Child Tax Credit saw a substantial increase to $2,000 per qualifying child. Up to $1,400 of this amount is refundable, depending on your income. This has doubled the previous amount, and the Child Tax Credit was previously only refundable if you were also claiming the Additional Child Tax Credit.Read the rest

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Home Equity Loan Tax Deduction

Is it possible to get a tax deduction on your home equity loan?home equity

Interest on home equity loans has traditionally been fully tax-deductible. But with the tax reform brought on by President Trump’s Tax Cuts and Jobs Act (TCJA), a lot of homeowners are struggling to work out whether they can still take a home equity loan tax deduction.

The answer is you can still deduct home equity loan interest. But the rules have changed, and there are more limitations than ever before.… Read the rest

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What is the Home Office Deduction?

In order to claim the home office deduction, you must know the square footage of your entire home and your home office. Auditors do not usually make home visits. If you send them photos of your home office, that is usually all of the verification that they need.

Determine Which Method to UseHome Office Tax Deduction

Percentage of your home – This method allows you to calculate your home office percentage and then claim the home office deduction. You need to determine the square footage of your entire home and the square footage of your office.… Read the rest

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What is the IRS Mileage Rate Tax Deduction?

Under current IRS rules, you can deduct a certain amount in mileage rates if you are using your vehicle for business reasons. Every year, the IRS publishes a list of the current standard mileage rates and the amount you can deduct on your taxes.

Let’s look at the standard mileage reimbursement rate and the types of mileage that are tax-deductible.

How Much is the Current Standard Mileage Rate?

current standard mileage rate

The current standard mileage rate is calculated through an annual study of businesses, where the fixed and variable costs of operating a vehicle for business is calculated.… Read the rest