Would you like to reduce your personal and corporate tax liability? At The Whitlock Company we are always looking for way to help businesses and individuals reduce their tax liability. We have several clients that have benefited with a direct, dollar-for-dollar reduction in tax liability by utilizing various tax credits.

We are going to highlight various credits that would be beneficial to our clients over the next several months with white papers. Each credit will be thoroughly addressed with the benefits clearly explained. To get us started, the list below contains common credits that may benefit various people. Are you taking full advantage?

  • American opportunity tax credit and lifetime learning credit are education credits that can be used by individuals who have higher education expenses. The American opportunity credit is 100% of the first $2,000 of tuition, fees and course materials paid, plus 25% of the next $2,000 expenses paid. The American opportunity tax credit can be claimed on joint returns with adjusted gross income of up to $180,000 (phase out starts at $160,000) and on a single return up to $90,000 (phase out starts at $80,000). The lifetime learning credit is $2,000 of tuition and fees paid during year and phases out at $120,000 for joint return or $60,000 for single.
  • Gasoline and special fuels credit can be used to recover the federal excise taxes on fuels used for farming purposes, non-highway purposes of trade or business, operation of intercity, local or school buses or certain nontaxable purposes.
  • Residential energy efficiency property credit is a 30% credit allowed for the cost and installation of solar panels, wind turbines and geothermal heat pumps.
  • Child and dependent care credit allows for up to $3,000 for one child or $6,000 for more than one child for child care expenses. Summer day camp expenses may qualify.
  • Child tax credit of $1,000 per child for couples with modified adjusted gross income of $110,000 or less or $75,000 or less for singles or heads of households.
  • Differential wage payment credit applies to employers who have employees performing uniformed services while on active duty.
  • Employer-provided child care credit can be claimed if you provide a qualified childcare facility. The credit is 25% of the qualified childcare facility expenditures plus 10% of the qualified childcare resource and referral expenditures paid or incurred during the year.
  • Rehabilitation credit can be taken on rehabilitation costs for buildings placed in service before 1936, you receive a 10% credit and if a building is a certified historic structure, the credit is 20%.

If you think you may benefit from any of these credits, please contact us today. Written by Shelly Toft, CPA, Manager