School choice is a term for education options that allow students and families to select alternatives to public schools. It is the subject of fierce debate in various state legislatures across the United States.
A tax deduction or benefit is an amount deducted from taxable income, usually based on expenses such as those incurred to produce additional income. Tax deductions are a form of tax incentives, along with exemptions and tax credits. The difference between deductions, exemptions, and credits is that deductions and exemptions both reduce taxable income, while credits reduce tax.
A tax credit is a tax incentive which allows certain taxpayers to subtract the amount of the credit they have accrued from the total they owe the state. It may also be a credit granted in recognition of taxes already paid or a form of state "discount" applied in certain cases. Another way to think of a tax credit is as a rebate.
Under United States tax law, itemized deductions are eligible expenses that individual taxpayers can claim on federal income tax returns and which decrease their taxable income, and are claimable in place of a standard deduction, if available.
A Roth IRA is an individual retirement account (IRA) under United States law that is generally not taxed upon distribution, provided certain conditions are met. The principal difference between Roth IRAs and most other tax-advantaged retirement plans is that rather than granting a tax reduction for contributions to the retirement plan, qualified withdrawals from the Roth IRA plan are tax-free, and growth in the account is tax-free.
A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in school. It also differs in many countries in the strict laws regulating renegotiating and bankruptcy. This article highlights the differences of the student loan system in several major countries.
A 529 plan, also called a Qualified Tuition Program, is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary. In 2017, K–12 public, private, and religious school tuition were included as qualified expenses for 529 plans along with post-secondary education costs after passage of the Tax Cuts and Jobs Act.
A Coverdell education savings account, is a tax advantaged investment account in the U.S. designed to encourage savings to cover future education expenses, such as tuition, books, and uniforms. It is found at Section 530 of the Internal Revenue Code. Coverdell ESAs were first introduced under the Taxpayer Relief Act of 1997.
A gift tax, known originally as inheritance tax, is a tax imposed on the transfer of ownership of property during the giver's life. The United States Internal Revenue Service says that a gift is "Any transfer to an individual, either directly or indirectly, where full compensation is not received in return."
The Offer in Compromise (OIC) program, in the United States, is an Internal Revenue Service (IRS) program under 26 U.S.C. § 7122, which allows qualified individuals with an unpaid tax debt to negotiate a settled amount that is less than the total owed to clear the debt. A taxpayer uses the checklist in the Form 656, OIC package to determine if the taxpayer is eligible for the program. The objective of the OIC program is to accept a compromise when acceptance is in the best interests of both the taxpayer and the government, and promotes voluntary compliance with all future payment and filing requirements.
The United States Internal Revenue Service (IRS) uses forms for taxpayers and tax-exempt organizations to report financial information, such as to report income, calculate taxes to be paid to the federal government, and disclose other information as required by the Internal Revenue Code (IRC). There are over 800 various forms and schedules. Other tax forms in the United States are filed with state and local governments.
The Household and Dependent Care Credit is a nonrefundable tax credit available to United States taxpayers. Taxpayers that care for a qualifying individual are eligible. The purpose of the credit is to allow the taxpayer to be gainfully employed. This credit is created by 26 U.S. Code (U.S.C) § 21, section 21 of the Internal Revenue Code (IRC).
In the United States tax law, an above-the-line deduction is a deduction that the Internal Revenue Service allows a taxpayer to subtract from his or her gross income in arriving at "adjusted gross income" for the taxable year. These deductions are set forth in Internal Revenue Code Section 62. A taxpayer's gross income minus his or her above-the-line deductions is equal to the adjusted gross income. Because these deductions are taken before adjusted gross income is calculated, they are designated "above-the-line". Thus, those deductions allowed in computing "taxable income" under section 63 of the IRC are "below-the-line deductions". Above-the-line deductions may be more valuable to high-income taxpayers than below-the-line deductions. Since tax year 2018, above-the-line deductions are reported on Schedule 1 of IRS Form 1040.
Under United States tax law, certain performing artists are eligible to deduct the expenses incurred in the course of their employment as performing artists. The deduction itself is provided by IRC § 62(a)(2)(B), while qualifications of a Qualified Performing Artist ("QPA") are provided by IRC § 62(b).
An adoption tax credit is a tax credit offered to adoptive parents to encourage adoption in the United States. Section 36C of the United States Internal Revenue code offers a credit for “qualified adoption expenses” paid or incurred by individual taxpayers.
The United States federal earned income tax credit or earned income credit is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient's income and number of children. Low-income adults with no children are eligible. For a person or couple to claim one or more persons as their qualifying child, requirements such as relationship, age, and shared residency must be met.
The American Opportunity Tax Credit is a partially refundable tax credit first detailed in Section 1004 of the American Recovery and Reinvestment Act of 2009.
The Lifetime Learning Credit, provided by 26 U.S.C. § 25A(b), is available to taxpayers in the United States who have incurred education expenses. For this credit to be claimed by a taxpayer, the student must attend school on at least a part-time basis. The credit can be claimed for education expenses incurred by the taxpayer, the taxpayer's spouse, or the taxpayer's dependent.
The Student and Family Tax Simplification Act is a bill that would amend the Internal Revenue Code to consolidate several different education tax incentives into an expanded American Opportunity Tax Credit. The American Opportunity Tax Credit, under this legislation, would provide a maximum credit of $2,500.
Form 1098-T, Tuition Statement, is an American IRS tax form filed by eligible education institutions to report payments received and payments due from the paying student. The institution has to report a form for every student that is currently enrolled and paying qualifying tuition and related expenses.
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