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Tax Credits and Deductions

Đang chơi bàiLearn about tax relief, benefits, and incentives. These include many changes to credits and deductions authorized late last year. Most are retroactive to 2018 and extend through 2020.

New in 2019: Affordable Care Act Fee Dropped 

The health care law’s “ starting with tax year 2019.

New, Higher Standard Deduction Adjusts for Inflation 

Đang chơi bàiThe law nearly doubled the standard deduction for most filers last year. The standard deduction for tax year 2019 is

  • $12,200 for individuals (up $200 from last year to adjust for inflation)

  • Đang chơi bài$18,350 for heads of household (up $350)

  • $24,400 for married couples filing jointly (up $400)

Standard Deduction Versus Itemizing

Deductions lower the amount of income that you pay tax on. You can take the standard deduction or you can itemize deductions. Your standard deduction may now be greater than your total itemized deductions.

Itemized Deduction Changes for 2019

Many itemized deductions were eliminated or capped in 2018. Here are a couple of new changes for 2019.

  • New Alimony and Divorce Payments

    • If you pay alimony under a divorce or separation agreement created or changed in 2019 or later, you cannot deduct it.

    • If you receive alimony under an agreement made or modified in 2019 or later, it won’t be included in your taxable income. 
    • For tax year 2019, you can deduct unreimbursed medical and dental expenses that exceed 7.5% of your adjusted gross income, just like last year.  
    • Đang chơi bàiThe threshold was supposed to go up to 10% for 2019 but was canceled out as part of a new law signed in late 2019.

Tax Rates Stay the Same as in 2018

Tax rates fell last year under the new tax law. The rates remain the same this year, ranging from 10% to 37%. The tax brackets, or income ranges, increased slightly for inflation. Check out this table with the 2019 and 2018 tax rates and brackets.

Personal and Dependent Exemptions Remain at Zero

These were eliminated last year. Prior to that, they lowered your taxable income by $4,050 each for you, your spouse, and your dependents. The higher standard deduction and increases in other credits may help offset the loss of the exemptions.

Child Tax Credit Stays Put After Doubling in 2018

Đang chơi bàiTax credits are better than deductions because they reduce your tax bill dollar-for-dollar. The now reduces your taxes up to $2,000 per child under 17. (This change went into effect last year.) Many more families now qualify for the credit as income limits have gone up to

  • Đang chơi bài$200,000 for individual filers (the same as last year and up from $75,000 two years ago)

  • Đang chơi bài$400,000 for married filing jointly (the same as last year and up from $110,000 two years ago)

Đang chơi bàiThis is a “refundable” credit, meaning you can get up to $1,400 per child back even if your 2019 tax bill is $0. You must claim the credit on your tax return to get it.

Social Security Number Required for Child Tax Credit

Any child you claim for the Child Tax Credit must now have a Social Security number. They must have the number by the due date of your tax return (including extensions).

Credit for Other Dependents, Created Last Year, Stays at $500

Đang chơi bàiYou can now claim a credit for your other dependents, including kids 17 and up and other relatives. To qualify, a dependent must be a U.S. citizen, U.S. national, or U.S. Green Card holder.

Learn More About the 2017 Tax Reform Law Changes

For more information about the tax law changes, including last year’s itemized tax deduction changes, see:

can help you by reducing the amount of tax you owe. To qualify, you must meet certain requirements and file a tax return. Even if you do not owe any tax or are not required to file, you still must file a return to be eligible. If EITC reduces your tax to less than zero, you may get a refund.

Do I Qualify for EITC?

You qualify for EITC if:

  • Đang chơi bàiYou have earned income and adjusted gross income within certain limits; AND

  • Đang chơi bàiYou meet certain basic rules; AND

Đang chơi bàiYou either:

  • Meet the rules for those without a qualifying child; OR

  • Have a child who meets all the qualifying rules for you or your spouse if you file a joint return.

Đang chơi bàiEITC has special rules for:

  • Victims of presidentially declared disasters. A special rule created for victims of major disasters in 2017 has been extended through 2025 and is retroactive to 2018. It’s one of many new tax changes enacted in December 2019.

Get Help With EITC

Use the to find out your:

  • Đang chơi bàiFiling status

  • Đang chơi bàiIf your child qualifies

  • Đang chơi bàiIf you’re eligible

  • The amount of credit you may receive

Tax Benefits for Education

Educational tax benefits can help with a variety of expenses, including tuition for college, elementary, and secondary school. 

Because of new tax law changesĐang chơi bài, education tax credits, deductions, and savings plans you may have used in the past have changed. 

Find Out if You Qualify for Education Benefits

  • to see if you’re eligible for education credits or deductions. This includes the American Opportunity Credit, the Lifetime Learning Credit, and the student loan interest deduction.

Education Credits

An education credit helps you pay education expenses by reducing the amount you owe on your tax return. There are two types of education credits:

  • Đang chơi bàiThe helps with expenses during the first four years of higher education. You can get a maximum annual credit of $2,500 per eligible student. If the credit lowers your tax to zero, you may get a refund.

  • The can be used toward tuition payments and related expenses at . It can help pay for undergraduate, graduate, and professional degree courses. Or, it can help with classes that improve job skills. You can claim up to $2,000 per tax return, and there is no limit on the number of years you can claim the credit.

Đang chơi bàiYou must meet income limits to be eligible for these credits. And you can’t claim both credits for the same student and the same expenses.

Deductions

A deduction reduces the amount of your income that is subject to tax. As a result, deductions can lower the amount of tax you have to pay.

Savings Plans

Education savings plans help parents and students save for elementary, secondary, and higher education expenses. The money you save or withdraw from your savings plan for qualified education expenses is tax-free. There are two types of savings plans:

  • Đang chơi bài are qualified tuition programs (QTPs) sponsored by states and colleges. They’re authorized under Section 529 of the Internal Revenue Code. With these plans, you can: 

    • Đang chơi bàiPrepay or contribute funds to an account to help cover qualified higher education expenses

    • Đang chơi bài to cover tuition at elementary or secondary schools (K-12)

    • Transfer or roll over funds from the 529 plan to an Achieving a Better Life Experience (ABLE) account. These funds can benefit the savings account holder or a family member. Learn how an ABLE account can help a person with a disability pay for education, housing, health, and other qualified expenses

    • . This change is included in a new lawĐang chơi bài passed in December 2019.

    • Pay for fees, books, supplies, and equipment required under qualified apprenticeship programs. This is also included in . 

  • The can be used to pay for eligible K-12 and higher education expenses. You may contribute up to $2,000 per year for each eligible student. When you open the account, the person receiving the benefits must be under 18 or have special needs.

Exclusions from Income

Đang chơi bàiYou don’t have to pay tax on payments you receive from your employer for tuition, books, and supplies for a course you’re taking. But you can’t claim these expenses for any other deduction or credit, including the Lifetime Learning Credit.

Đang chơi bài .

  • Đang chơi bàiFind out if your state offers a on energy-efficient home appliances.

  • Energy-Saving Home Improvements

     for any of these purchases for your home:

    • Solar panels

    • Solar water heaters

    • Đang chơi bàiWind turbines

    • Đang chơi bàiGeothermal heat pumps

    • Fuel-cell equipment

    These tax credits are valid through 2021. 

    Energy Tax Breaks for 2018 - 2020

    A law passed in December 2019Đang chơi bài reauthorized many energy tax breaks that had expired in 2017. They're retroactive to 2018 and extended through 2020 or longer. They include credits for:

    • Energy efficient homes

    • Energy-efficient commercial buildings

    • Đang chơi bàiNonbusiness energy property

    • Qualified fuel cell vehicles

    • Đang chơi bàiAlternative fuel vehicle refueling property

    • Đang chơi bàiEnergy tax incentives for biodiesel and renewable diesel, extended through 2022

    to individuals and businesses hurt by a major disaster or emergency.  

    Get Your Tax Refund Faster After a Disaster

    In a , you can get a faster refund by filing an . You will need to claim the disaster-related losses on your tax return for the previous year.

    Đang chơi bàiGet guidance from the IRS on or . 

    Tax Relief for Recent Disasters

    Get a list of the .

    . To deduct donations, you must file a with your tax form. With proper documentation, you can claim vehicle or cash donations. Or, if you want to deduct a non-cash donation, you'll also have to fill out a .

    How Much Can You Deduct?

    Đang chơi bàiThe amount of money that you can deduct on your taxes may not be equal to the total amount of your donations.

    • If you donate non-cash items, you can claim the fair market value of the items on your taxes.

    • If you donated a vehicle, your deduction depends on if the organization keeps the car or sells it at an auction.  “” explains how your deduction is determined.

    • If you received a gift or ticket to an event, you can only . 

    Keep Records of Charitable Donations

    Đang chơi bàiTo claim deductions, it’s important to keep records of your donations to charities. You may not have to send these documents with your tax returns, but they are good to keep with your other tax records. Common documents include:

    • of vehicle donations
    • for cash donations
    • for non-cash deductions
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    Last Updated: August 24, 2020

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