Line 31: Education Credits
- If you took college classes in 2005, you can choose to take either a tax credit or a deduction for your tuition expenses.
- You can take the Hope Credit only if you are in your first or second year of college.
- You can take the Lifetime Learning Credit for any college expenses.
- You can take only one tax benefit per student per year. If you took the Tuition and Fees Deduction on line 19, you cannot a tax credit for the same person on line 31.
- Use Form 8863 (PDF) to claim your education credits. Attach this form to your tax return.
Tax Tips The Hope Credit provides a reduces your taxes more than the Lifetime Learning Credit or Tuition Deduction. Use the Hope Credit for your first two years of college.
Some people benefit more from the Tuition Deduction instead of the Lifetime Learning Credit. If you are claiming other tax credits, you might be to your benefit to take the Tuition Deduction instead.
Line 32: Retirement Savings Credit
- If you contributed to a retirement plan, you may be eligible to reduce your taxes.
- You qualify if your adjusted gross income (line 22) is $25,000 or less, and
- You contributed to a 401(k) plan, traditional IRA, Roth IRA, or other retirement plan.
- Use Form 8880 (PDF) to calculate your tax credit. Attach Form 8880 to your tax return.
Tax Tip Contributing to a Roth IRA and taking this tax credit will provide significant tax savings in the future. Withdrawals from a Roth IRA are completely tax-free if you hold the money for at least 5 years, and you withdraw the money during retirement, for college expenses, to purchase a home, or if you become disabled.
Line 33: Child Tax Credit
- If you have a child, the child tax credit can reduce you taxes.
- To qualify for this credit, your child:
- Must be 16 years old or younger at the end of the year,
- Must be claimed as a dependent, and
- You must check the box in column 4 on line 6c on page 1 of your 1040A.
- You can claim up to $1,000 for each child who qualifies.
- Use the "Child Tax Credit Worksheet" page on 39 of the instruction booklet to calculate your credit.
- If your Child Tax Credit amount is more than your tax (line 28), you might be able to claim the excess as "Additional Child Tax Credit" on line 42.
Line 34: Adoption Credit
- If you adopted a child in 2005, you can take a tax credit for expenses you paid.
- Use Form 8839 (PDF) to calculate your tax credit. Attach the form to your tax return.
- The maximum tax credit is $10,390 per adopted child.
- You cannot claim any expenses that were reimbursed by your employer.
Line 35: Total Tax Credits
- Using a calculator, add up the amounts on lines 29, 30, 31, 32, 33, and 34.
- Put the total figure on line 35.
- These are your total credits. They reduce your taxes.
Line 36: Tentative Tax
- Using a calculator, enter the amount from line 28 (tax) and subtract the amount from line 35 (total credits).
- Enter the result on line 36.
- If the result is a negative number (less than zero), put enter 0 ("zero") on line 36.
Line 37: Advance Earned Income Credit Payments
- Enter the amount of advance Earned Income Credit payments from your W-2 statement, box 9.
Line 38: Total Tax
- Using a calculator, add the amounts on line 36 and 37.
- Put the result on line 38.
- This is your total tax. This represents the amount of tax you are liable for. Use this figure to compare your tax to the average tax burden of a US citizen.
Line 39: Withholding
- Add up the total amount of federal income tax withheld from all your W-2 and 1099-R statements. Find these amounts on Form W-2 box 2 and Form 1099-R box 4.
- Put the total amount on line 39.
- This amount represents how much money you have paid-in towards your total tax liability (line 38).
Line 40: Estimated Taxes
- Enter the total amount of federal estimated tax payments you have made during 2004, including any final estimated payment you made by January 15, 2005.
- Include any amounts applied from your 2003 tax return.
Tax Tip Did you know you could pay your estimated taxes over the Web, over the phone, or by automatic debit from your bank account? Find out more about the Electronic Federal Tax Payment System (EFTPS).