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Children & Dependents
Adoption Credit

  • Worth a maximum of $13,190 for 2014 returns
  • In addition to Form 8839, Qualified Adoption Expenses, one or more adoption-related documents must be mailed with 2012 returns. It takes 6-8 weeks for mailed returns to be processed, so the IRS encourages choosing direct deposit to speed refunds.

Child Tax Credit

  • Worth up to $1,000 per eligible child and remains fully refundable for taxpayers with an earned income of over $3,000 for 2014

Expanded Earned Income Credit

  • Up to $6,143 for families with 3 or more qualifying children for 2014. The actual credit is based on filing status, number of qualifying children, and income level.
  • Phased out at $52,427 modified adjusted gross income if married filing jointly with 3 or more qualifying children

Expanded Child and Dependent Care Credit

  • Maximum amount of qualifying expenses is $3,000 per qualifying dependent or $6,000 for 2 or more qualifying dependents
  • Credit worth between 20% and 35% of qualifying child care expenses for 2014 for children under the age of 13 (if parents work or attend school)

Green Vehicles

Plug-in Electric Drive Vehicle Credit

  • Credit ranging from $2,500 to $7,500 for qualified plug-in electric drive vehicles placed in service during 2012
  • Credit phases out when manufacturers sell at least 200,000 vehicles
  • Vehicle's battery capacity must be at least 4 kilowatt hours – credit amount increases for each kilowatt hour above 5

Higher Education
American Opportunity Tax Credit (modified HOPE Credit)

  • Maximum credit of $2,500 per student in 2014 (covers 100% of the first $2,000 and 25% of the next $2,000) for tuition, fees and course materials (books) for the first 4 years of post-secondary education in a degree or certificate program
  • Up to 40% of the credit is refundable unless student is under age 24 and certain conditions apply
  • Phased out at modified adjusted gross income $80,000 - $90,000 ($160,000 - $180,000 if married filing jointly)

Student Loan Interest Deduction

  • Annual limit of $2,500 in eligible student loan interest can be deducted on 2014 returns
  • Phases out at $60,000 to $75,000 ($125,000 to $155,000 for joint returns)
  • Student must have been at least half-time enrolled in a degree program
  • Applies to interest paid on loans for tuition, required enrollment fees, books, supplies, equipment, room & board, transportation and other necessary expenses
  • Above-the-line deduction, meaning it can be can be claimed by those taking the standard deduction or itemizing

Residential Energy Efficient Property Credit

  • Credit of 30% for expenditures related to larger residential energy improvements (solar hot water property, geothermal heat pumps and wind energy property) placed in service before Dec. 31, 2016
  • Limit on credit amount removed for solar electric property
  • Credit caps are also eliminated for qualified solar water heating, geothermal pumps, and wind energy property; $500 cap for each half kilowatt of capacity of the qualified fuel cell property

Tax Exclusions When Selling A Home

  • A home seller who is a single taxpayer has the opportunity to owe no tax on the first $250,000 of profit for the sale of a home owned and lived in for two of the last five years. 
  • A married couple owes no taxes on the first $500,000 of profit for the same time period. 
  • When a main residence is sold after the death of a spouse, it must be sold within two years of the date of death for the surviving spouse to claim the $500,000 exclusion.

Itemized deductions

  • Homeowners reap annual tax benefits from the deductions allowed for mortgage interest and itemizing, which is usually more beneficial than taking the standard deduction.