Your Federal Income Tax 2016 Part 6: Part Six - Figuring Your Taxes and Credits (Tax Bible Series 2016)

Part Six - Figuring Your Taxes and Credits
The nine chapters in this part explain how to figure your tax and how to figure the tax of certain children who have more than $2,100 of unearned income. They also discuss tax credits that, unlike deductions, are subtracted directly from your tax and reduce your tax dollar for dollar. Chapter 36 discusses the earned income credit. Chapter 38 discusses a wide variety of other credits, such as the adoption credit.
Table of Contents
• 30. How To Figure Your Tax
o Introduction
o Figuring Your Tax
o Alternative Minimum Tax (AMT)
o Tax Figured by IRS
? Filing the Return
• 31. Tax on Unearned Income of Certain Children
o Introduction
o Useful Items - You may want to see:
o Which Parent's Return To Use
? Parents Who Don't File a Joint Return
o Parent's Election To Report Child's Interest and Dividends
? Effect of Making the Election
? Figuring Child's Income
? Figuring Additional Tax
o Tax for Certain Children Who Have Unearned Income
? Providing Parental Information (Form 8615, lines A–C)
? Step 1. Figuring the Child's Net Unearned Income (Form 8615, Part I)
? Step 2. Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part II)
? Step 3. Figuring the Child's Tax (Form 8615, Part III)
• 32. Child and Dependent Care Credit
o Reminders
o Introduction
o Useful Items - You may want to see:
o Tests To Claim the Credit
? Qualifying Person Test
? Earned Income Test
? Work-Related Expense Test
? Joint Return Test
? Provider Identification Test
o How To Figure the Credit
? Figuring Total Work-Related Expenses
? Earned Income Limit
? Dollar Limit
? Amount of Credit
o How To Claim the Credit
? Tax credit not refundable.
o Employment Taxes for Household Employers
• 33. Credit for the Elderly or the Disabled
o What's New
o Introduction
o Useful Items - You may want to see:
o Are You Eligible for the Credit?
? Qualified Individual
? Income Limits
o How to Claim the Credit
? Credit Figured for You
? Credit Figured by You
• 34. Child Tax Credit
o What's New
o Introduction
o Useful Items - You may want to see:
o Qualifying Child
o Amount of Credit
? Limits on the Credit
o Claiming the Credit
o Additional Child Tax Credit
o Completing Schedule 8812 (Form 1040A or 1040)
? Part I
? Parts II–IV
• 35. Education Credits
o Introduction
o Useful Items - You may want to see:
o Who Can Claim an Education Credit
o Qualified Education Expenses
? No Double Benefit Allowed
? Adjustments to Qualified Education Expenses
• 36. Earned Income Credit (EIC)
o What's New
o Reminders
o Introduction
o Useful Items - You may want to see:
o Do You Qualify for the Credit?
? If Improper Claim Made in Prior Year
o Part A. Rules for Everyone
? Rule 1. Your AGI Must Be Less Than:
? Rule 2. You Must Have a Valid Social Security Number (SSN)
? Rule 3. Your Filing Status Cannot Be Married Filing Separately
? Rule 4. You Must Be a U.S. Citizen or Resident Alien All Year
? Rule 5. You Cannot File Form 2555 or Form 2555-EZ
? Rule 6. Your Investment Income Must Be $3,400 or Less
? Rule 7. You Must Have Earned Income
o Part B. Rules If You Have a Qualifying Child
? Rule 8. Your Child Must Meet the Relationship, Age, Residency, and Joint Return Tests
? Rule 9. Your Qualifying Child Cannot Be Used By More Than One Person To Claim the EIC
? Rule 10. You Cannot Be a Qualifying Child of Another Taxpayer
o Part C. Rules If You Don't Have a Qualifying Child
? Rule 11. You Must Be at Least Age 25 but Under Age 65
? Rule 12. You Cannot Be the Dependent of Another Person
? Rule 13. You Cannot Be a Qualifying Child of Another Taxpayer
? Rule 14. You Must Have Lived in the United States More Than Half of the Year
o Part D. Figuring and Claiming the EIC
? Rule 15. Your Earned Income Must Be Less Than:
? IRS Will Figure the EIC for You
? How To Figure the EIC Yourself
o Examples
? Example 1. John and Janet Smith (Form 1040A)
? Example 2.