Types of tax Credits

Or, you can choose to get all of the benefit of the credit when you file your tax return for the year. If you choose to have advance payments of the premium tax credit made on your behalf, you will reconcile the amount paid in advance with the actual credit you compute when you file your tax return. Either way, you will complete Form 8962, Premium Tax Credit (PTC) and attach it to your tax return for the year.

Update November 9, 2011 — This page has been updated to reflect the fact that the American Opportunity Tax Credit, which was to expire at the end of 2010, was extended for an additional two years through December 2012 by the Tax Relief and Job Creation Act of 2010.

You may deduct charitable contributions of money or property made to qualified organizations if you itemize your deductions. Generally, you may deduct up to 50 percent of your adjusted gross income, but 20 percent and 30 percent limitations apply in some cases.

A credit for the costs of care for a qualifying individual to allow you to work or look for work. The dollar limit on the amount of the expenses you can use to figure the credit is $3,000 for the care of one qualifying individual or $6,000 for two or more qualifying individuals.

EITC, Earned Income Tax Credit, is a benefit for working people who have low to moderate income. A tax credit means more money in your pocket. It reduces the amount of tax you owe and may also give you a refund.

The mortgage interest credit helps lower-income individuals afford home ownership. You must contact the appropriate government agency about acquiring a Mortgage Credit Certificate (MCC) before getting a mortgage or buying a home.

Investment interest expense. Investment interest expense is the interest paid on money borrowed to purchase taxable investments. This would cover margin loans you use to buy stock in your brokerage account. In such cases, you can deduct the interest on the margin loan.

The Lifetime Learning Credit (LLC) is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses--including courses to acquire or improve job skills.

Tax Information Related to ''tax deductions for medical expenses'' Health care and medical expenses for yourself, your spouse, and your dependents can be costly during the year. However, if you claim those expenses as deductions or credits on your tax return at the end of the year, you can reduce your taxable income or taxes owed.

Miscellaneous deductions are all the deductions that don’t fit into other categories of the tax code. There are two types of miscellaneous deductions, deductions subject to the 2% limit and those that are not.

All income taxes that are imposed by state and local governments can be deducted on your federal taxes subject to a few rules. Learn these tax rules. All income taxes that are imposed by state and local governments can be deducted on your federal taxes subject to a few rules.

Retirement savings eligible for the credit The Saver’s Credit can be taken for your contributions to a traditional or Roth IRA; your 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan; and your voluntary after-tax employee contributions to your qualified retirement and 403(b) plans.