![]() When an unexpected amount appears in relation to nonrefundable credits, it is a good indication that the tax owed is equal to zero and the limitation of these credits has been reached. The nonrefundable credits are being applied to the tax balance in a specific order and are being evaluated against the moving declining balance of your tax bill such that when the tax owed reaches zero, the tax credit that may have been calculated at $800 on the tax credit worksheet will be displayed as $43 (the number that brings the tax balance to zero) on Schedule 3. ![]() Therefore, the presentation of your nonrefundable tax credits may take on a strange look as they are applied to your outstanding tax owed. In this example, $350 (tax owed) - $4,000 (tax credits) = $0 (tax owed). Let’s say you are eligible for $4,000 in nonrefundable credits and your tax bill is $350. Īs the name ‘nonrefundable’ indicates, the best these credits can do is reduce the tax you owe to zero. Side note about the quality of these tax credits. These are the same nonrefundable credits as were present on the 2017 Form 1040. Schedule 6 - Foreign Address and Third Party Designee Schedule 5 - Other Payments and Refundable Credits Schedule 1 - Additions to Income & Adjustments to Income Jump to a specific Schedule (location) by clicking below or just scroll down. Major topics will be discussed in this section but the biggest change is the Form 1040’s new look.īelow is a brief introduction to these new Schedules. TCJA also added a new deduction that most of our Schedule C clients will be eligible for called the Qualified Business Income Deduction.Īll changes are outlined on Link & Learn, in Pub 4491, and Pub 4012. ![]() PLUS! There are no 1040As and no more 1040EZs.Ģ017 Tax Cuts and Jobs Act (TCJA) made significant changes to the Child Tax Credit, the Additional Child Credit and added a new credit called Other Dependents Credit. It’s a Postcard! Many of the seldom used lines from the prior year Form 1040 have been offloaded to a suite of new Schedules. Significant changes you are going to notice ![]()
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