As a gesture of ultimate compassion towards human life many parents or single parent adopt children and take care of them and provide them with all the necessities of life which help with become better citizens and good human beings. Government also appreciates this gesture and in their effort to support this great cause provides some incentives to the people doing so. Majorly adoption procedures are governed by Affordable Care Act. Adopting parents must follow the procedures laid down in the act to complete the formalities of adoption. In doing all this they also have to make certain expenses out of their pocket. They have to pay for the cost of attorney, court fee, consultation charges, travelling charges etc. from their pocket. As a relief to such taxpayers from IRS they can get tax credits towards this expenditure. Also it is no to be note that these credits would be fully refundable meaning that even if there is no or less tax liability of a tax payer which less that cost of such credits, still the taxpayers can get refunds on account of adoption credits.
There is a maximum credit limit which a adopting taxpayer can get benefit from. This limit stands revised in the year 2011 and currently stands at $13,170 per child. The previous limit for this was $ 12,150. The claiming taxpayers must provide vouchers of the expenses made while adopting a child to avail this credit at the time of filing their tax returns. Form 8839 needs to be filled for claiming adoption credits.
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The IRPAC in their recommendations for the year 2010 had mentioned requirement to enhance effective of Form W-2. Taking clue from these recommendations IRS has already unveiled a new look form W-2 which will be used while filing tax returns in year 2011. W-2 form is primarily used by salaried individuals to report their income and deductions throughout the tax year. The new look form W-2 will be optional (to furnish certain details related to coverage of an employer sponsored group health plan) to be used in the year 2011 but will be mandatory from next year onwards.
The new codes have also been allotted which will be required to be filled by employers regarding a sponsored group health plan. As employers will need certain time to make their systems in compliance to these new requirements it has not been mandatory to report such information in this year’s new W-2. IRS will also come out with details guidelines on how this has to be done by employers later in the year.
Let us also clear an important thing regarding this new requirement. IRS does not intend to tax the premiums of employer sponsored group health plans but just needs to collate this information to non-tax purposes. So in case the requirement of the new W-2 worry you, just relax there would be no additional tax burden on you on account of this provision.
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Come winters and your cost on account of energy usage is bound to go up. It is essential that we use extra heating during chilly winters and thus we have to pay extra for this usage. Due to advancement in science and technology there are several products which are available in the market which can help us save energy and save money. Unfortunately these products are not very popular and priced little more than the traditional products which are more prevalent in usage. Internal Revenue Service (IRS) department offers tax savings if someone spends on installing these energy saving products. Therefore you can have double savings this winter; first on account of your lower energy bill and second on account of reduced tax liability.
There are two types of energy credits which eligible taxpayers can claim while filing their tax returns:
- Non-Business energy credits – Under this scheme if you have done any energy efficient improvements in your house (such as installing energy efficient water heaters, air conditioners, stoves, roof insulations, etc) during the year 2009 and 2010 you become entitled to claim tax credits worth $ 1500.
- Residential Energy Efficient credits – Similar to the above scheme under this also taxpayers can claim up to 30% of the money spent by them in installing energy efficient equipments at their homes. The only different is these equipments should be the one which generate energy such as a solar water heater, solar lights, wind turbines etc.
So let us all contribute to our environment and also save money by installing energy efficient equipments.
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