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LSDefine

Simple English definitions for legal terms

tax credit

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A quick definition of tax credit:

A tax credit is a way to reduce the amount of taxes you owe. It's different from a tax deduction, which only lowers your taxable income. With a tax credit, the amount is subtracted directly from your tax bill. For example, if you owe $10,000 in taxes and have a tax credit of $1,500, you would only have to pay $8,500. Some tax credits can even give you money back if you don't owe any taxes. Popular tax credits include ones for having children, buying energy-efficient products, and paying for health insurance.

A more thorough explanation:

A tax credit is a type of tax benefit that directly reduces the amount of tax a person owes. Unlike tax deductions, which only reduce taxable income, tax credits are subtracted from the tax liability itself. This means that if a person owes $10,000 in taxes and has a tax credit of $1,500, they would only owe $8,500 in taxes.

Some tax credits are refundable, which means that if the credit exceeds the amount of tax owed, the taxpayer will receive a refund for the difference. For example, if a person owes $1,000 in taxes but has a refundable tax credit of $3,000, they would receive a $2,000 tax refund from the IRS.

Examples of tax credits include:

  • Child tax credit
  • Health insurance premium tax credit
  • Energy efficiency tax credit

The child tax credit is a tax credit that parents can claim for each qualifying child. The credit is worth up to $2,000 per child and is partially refundable. This means that if the credit exceeds the amount of tax owed, the taxpayer may receive a refund for up to $1,400 per child.

The health insurance premium tax credit is a tax credit that helps people afford health insurance purchased through the Health Insurance Marketplace. The credit is based on income and household size and can be used to lower monthly premiums or to claim a refund on taxes.

The energy efficiency tax credit is a tax credit that incentivizes homeowners to make energy-efficient improvements to their homes. The credit is worth up to 10% of the cost of eligible improvements, such as insulation, windows, and doors.

Overall, tax credits are a valuable tool for reducing tax liability and increasing tax refunds. By taking advantage of available tax credits, taxpayers can keep more of their hard-earned money.

tax court | Tax Cuts and Jobs Act of 2017 (TCJA)

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Dkk
19:42
SEO is big money
2016 pushed the conservative party into populism irreversibly
Dkk
19:43
Maybe, but if this is populism, then every election is populist.
19:43
@Dkk: yeah register 1 website and every swinging tom dick and harry calls/emails/texts to 'help with seo'. like bruh, if YOU found it, what i am doing is working
Dkk
19:43
Indeed!
19:48
wasp, i think people are hopeful for a gov who at least attempts to care about the common man
MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
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