Hi, wine and dime listeners. Amy Irvine here and welcome to part four of the five part series where we're talking about all of the different parts of 10 40. Well, not all of them, several parts of the 10 40. And some of the schedules that go along with it. So, so far we've talked about the basic 10 40, the front side, where income is coming from.

We've talked about Schedule one. Schedule one had information about adjustments, so pluses and minus. To income. Schedule two talked about additional taxes that were computed on some of the income that you had received. And this part today we're gonna be talking about additional credits and payments. Now that's after the taxes calculated.

You can receive some credits and taxes and that if you look at the backside, what we call the back, Of your 10 40, which, uh, basically is all of the credits and payments that you're going to receive to reduce your liability or, or, or not even reduce your liability necessarily. It could be that, but it would add into, you know, how much money you have to pay or how much of a refund that you're ultimately going to get.

But before we dig into that, I wanted to take a moment to. Um, talk about the winery that we are promoting this month as we travel with our taste buds, as I like to say. And that is pudding river.com. Pudding River is in the Willamette Valley. The, um, the actual winery is there. Now some of the grapes come from different locations, but they do have a ve Blanc that.

The grapes actually come from the Willamette Valley area and I was really shocked. I, I didn't know what that type of grape tasted like, so it was quite enjoyable for me to be able to actually, uh, taste something different I wasn't familiar with. If you are interested in exploring with your taste buds, I would recommend that you go out to pudding river.com/r/wines.

Explore something new and exciting. Okay. Back to schedule three. Uh, this is where we might get some additional credits and payments. So I'm gonna go down through this form. It's actually two pages. Uh, I don't know that I'm gonna hit every line. I'm trying to keep these podcasts to about 15 to 20 minutes at most.

So some of this I'm gonna really graze over, but some things I want you to be thinking. On the first line, uh, the first part is what's called non-refundable credits. So if you don't pay enough in, you're not gonna get any money back. It's just, this is just gonna offset any amount of liability or tax computation that you might owe.

You can get something called a foreign tax credit. Now we see this a lot on people's investment, um, what's called a 10 99 consolidated. They may have held international funds within their, um, brokerage account, and they may have paid a foreign. So we will put that line, one of their schedule three to get, give them a foreign tax credit, so that helps offset the taxes that you actually are owing.

The second line, um, is for credit for child and dependent care expenses. So if you have a child, you pay daycare expenses, you can get some benefit based on your income level based on how. Paid, you can get some credit, uh, for that particular, for those particular expenses. Now it's not a hundred percent that you get.

So when people get all excited about it, um, thinking they're gonna get a tax credit for paying for their, uh, childcare, that is not the case. And as I mentioned, the income, there is income limits that come into play. On that, the, the lowest amount you would get would be 20%. The highest amount would be 35%.

t, the maximum you can get is: 3000

And if you have an, uh, flexible spending account, like a dependent care, um, flexible spending account, often you, it's, you can't get both cuz you can't use the same dollars. But if you have two children, sometimes we're able to get you. Additional amount on your tax return. So you max out your flexible spending account at $5,000, and then you get the additional $1,000 sometimes on the, on the schedule three.

Uh, the other thing on a schedule three is education credit. So if you. , uh, your or your child is going to school, then you may be eligible for some education credits. There's the American tax, uh, opportunity, American Tax. Yeah, opportunity Credit. And then there's also the lifetime learning credit. You may be eligible for one of those particular credits if you have some college expenses.

also, if you are saving, there's a form called 88 80. If you are saving in your retirement account, you may be eligible for a retirement credit. Now, again, this is limited to, uh, in, there are some income limits that come into play, so not everybody is gonna be eligible for that. Um, most people, uh, that have income less than 68,000.

um, it's a percentage that you would actually be eligible for if you earn less than $20,000. So for some of our college students that may have contributed to like a Roth I RRA or something like that, that's where we're able to take into consideration possibly some, some of their, in, some of their retirement savings or somebody new, you know, newly working, didn't earn a lot in the first year, they may be eligible.

That credit as well. Not a lot of people, but some people are. And if you are, then you will get that credit on your schedule three, and that will carry forward to the backside of the 10 40. There's also residential energy credits. Now, what's interesting about residential energy credits is that I know contractors sometimes like to say, oh yeah.

This is energy efficient or star efficient or, um, because it's, uh, we had a situation where somebody put in a heat pump, but they didn't put in a geo heat pump. So they, they weren't actually eligible for that. So you would get, if you were getting residential energy, G credits, that is where you would actually see that credit is on schedule three.

If there are general business credits you might be eligible for, you'll know it. And that also goes on schedule three. Any credit for prior year minimum tax would actually go on schedule three. If, if you, um, there's a credit for elderly and disabled, uh, you have to attach a Schedule R in order to be, to get that, but, Possibly one that you'd be eligible for, uh, if you're over, um, if you qualify for disability or what they consider, I hate this word elder, but if, um, if you do, then you would get that, that credit, and that's something that you should look into.

There's also alternative motor vehicle credit. So for some people they might be eligible for that. Or a qualified plug-in motor vehicle credit if you've purchased one of those. If you have mortgage, sometimes if you have mortgage interest, you can get a credit for that. It just depends on the situation and um, the form that you would need.

Now this is not, um, just to fyi, cause I know people are gonna be listening and saying, wait, I thought I couldn't itemize. You know, that particular, um, I thought I couldn't itemize mortgage credit, uh, on Schedule A anymore. So this is for, um, to dig into it a little bit more, and you can certainly read a bit more, but it's for homeowners that are claiming this particular type of, um, You're gonna have to get like a mortgage credit certificate, uh, um, from a local or state government agency.

So it's designed for lower to moderate income earners to help them a bit, but so that it might be something you're eligible for, but it's pretty limited in nature. So I don't wanna get anybody's hopes up. Uh, you can also get a qualified electric car or vehicle credit or alternative fuel vehicle, um, refueling credit.

And there are some credits to holders of tax credit bonds. So those are a few non-refundable. And again, non-refundable means if you don't owe or you didn't pay the tax. So if you're bottom line, like you can add all these items up and if you don't owe income tax, you can't get the money. They're not refund.

it just helps lower your tax liability. But then there is what's called refundable credits. Now, refundable credits mean that you may not have actually paid anything into the system and yet you're getting money back. One of the first items listed on there is the net premium tax credit. So if you, um, are on the exchange, the healthcare exchange, and you overpaid your healthcare premium, and you could have paid.

Then you will actually get a refundable credit for that particular access that you paid over and above what you were required to pay. You also may be filing this tax return at a later date. Maybe you had to do an extension and you overpaid. You can get the amount paid with, uh, the request to extend to file that would go on payments and other refundable credits that you've already made.

Um, if you have access Social Security, then, so in other words, maybe you had two employers and aggregately, they withheld Social security above and beyond the social security tax limit. That would be something that you could get back. If you have, uh, fuel tax. There's certain credits that you can get for Fed, uh, for federal tax on fuels.

nd family leave wages paid in: 2022

is still following through in: 2020

fore October of, uh, first of: 2021

So be aware of those and if there was anything in this list that I mentioned to you, don't hesitate to reach out or look at your own tax return and, and ask some questions. Questions are always good because the answer may be that it doesn't apply to you, but it's still helpful to know that, that, uh, you at least explored it.

We hope you've enjoyed this podcast today. Uh, today's as always, today's episode is of We hope you've enjoyed this podcast today. Today's episode of Wyman Dime is sponsored by Rooted Planning Group of the only financial planning firm that believes life is about events sponsored by your dollars and cents.

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