So many people, even those who do their own taxes, don't really understand the basics of taxes. Today, a very brief overview of one small piece of tax filing that is frequently misunderstood.
What is the difference between a credit and deduction?
Credits are a direct dollar-for-dollar reduction of an individual's tax liability. There are two different types of credits: non-refundable and refundable.
Non-refundable credits can reduce the amount of tax owed to $0, but cannot increase the amount of a refund. (Examples: child tax credit, retirement savings contribution credit.) Refundable credits, on the other hand, can reduce the amount of tax owed and, once your tax liability has reached $0, contribute to your tax refund. (Examples: Earned Income Tax Credit!)
Deductions are amounts that are subtracted from a person's adjusted gross income to arrive at the taxable income. It reduced's an individual's tax liability in proportion to his or her tax bracket.
I hope that helps!
Thursday, March 22, 2012
Thursday, March 15, 2012
Free Application for Federal Student Aid
Tax season is a good time to submit your application for federal grants and loans for higher education. If you are filing taxes with Ohio Benefit Bank, it is extra easy!
First, at the beginning of your tax filing session, be sure to electronically sign the "Consent to Use and Disclose" forms. This allows the OBB software to automatically populate the FAFSA forms in your OBB account with the relevant 2011 tax information. If you don't sign these consent forms, you will need to enter your tax information by hand.
The Ohio Benefit Bank also has busted some myths about federal aid here. Did you know you can get up to $5,710 per year for a single grant that doesn't need to be paid back? You could be eligible for more than one! A single loan could be worth up to $20,500.
First, at the beginning of your tax filing session, be sure to electronically sign the "Consent to Use and Disclose" forms. This allows the OBB software to automatically populate the FAFSA forms in your OBB account with the relevant 2011 tax information. If you don't sign these consent forms, you will need to enter your tax information by hand.
The Ohio Benefit Bank also has busted some myths about federal aid here. Did you know you can get up to $5,710 per year for a single grant that doesn't need to be paid back? You could be eligible for more than one! A single loan could be worth up to $20,500.
Thursday, March 1, 2012
Tax Update
Whew. Sorry for the excessively long break. I got majorly caught up in tax season. The upside is that we're also getting lots of great info and stats ABOUT tax season that I just haven't had the chance to post.
Just a quick update for now: Since e-file went live on January 17 until February 27, Ohio Benefit Bank counselors have assisted 11,308 people file their 2011 taxes, helping to access over $20 million in refunds for Ohioans!
53 of those people and about $78,000 are from Oberlin Community Services in conjunction with the Bonner Center for Service and Learning!
Just a quick update for now: Since e-file went live on January 17 until February 27, Ohio Benefit Bank counselors have assisted 11,308 people file their 2011 taxes, helping to access over $20 million in refunds for Ohioans!
53 of those people and about $78,000 are from Oberlin Community Services in conjunction with the Bonner Center for Service and Learning!
Subscribe to:
Posts (Atom)