ATOT's Second Annual Tax Time Thread!

[CPA]

Originally posted by: sygyzy

Originally posted by: CPA

Originally posted by: sygyzy
You're right, I'll repost.

I was granted some stock last year (2004). The stock vested and half was converted to a different company's stock (we were bought) and half was put into cash. Part of cash was given to me and part was kept to be distributed over the next three years (40%, 40%, 20%). I wrote a check to cover the stock purchases (paying less than their value of course). I sold half the stock and made some gains (very little). I still own half.

What are my tax consequences? I assume it is 100% ordinary income? What exactly will be taxed? Will I be taxed on the cash portion that I never received (they are keeping it then slowly releasing it, remember). Do I simply take the value of the stocks, minus the cost, then add that to my yearly income as if I was given all cash?

Do I fall under AMT?

sygyzy, sorry about missing your question earlier, I thought I had responded, but it looks like I just read it and thought to myself "crap, that's complicated" and forgot to get back to it. In any case, I can answer one question and have several questions to help me understand your issue.

1) AMT is not something that can be answered easily. You will need to account for everything and determine if you will have to pay AMT. A software program will help with this. Or you can rough draft it by hand with schedule 1040, schedule A (if you itemize) and schedule 6251 (AMT schedule).

2) Now for my questions. Do you know if these were Incentive Stock Options or Non-qualified stock options (This is key)? Did you receive the cash from the broker or through payroll? If I understand you right, you received a portion of the cash that came from the conversion AND you made some money selling the converted stock, correct? How long did you hold the stock?

CPA,

Thanks for taking the time. Answers:

I held the stock a few months. Much less than a year. I still have roughly half that will reach a year in a few months. I received the cash from payroll I believe. I am not sure why this makes a difference? It might be the broker. I gave them my bank routing number and account and the money just appeared deposited. Then I wrote a check to cover my cost for the stocks. The stocks are Incentive Stock Options. You are correct, I made some money from selling the converted stock. Not much though, maybe a few $100. One confusing part is that the cash I received was because they just cashed out half my shares into cash. They weren't really "sold" per se. They just took number stocks, divided by two, and gave me cash for it. In that case, I didn't profit on the market per se. But I did "profit" since I bought them for less than their value. I want to know how this is going to be taxed?

If ran through payroll, it will show up on your W2 (which they should have already accounted for the tax impact), if only through the broker then you will get a 1099 (which may not have had the taxes withheld).

But for the rest of your issue, I'm still not sure I'm clear what happened or which portion (the cash you were given or the options you exercised) that you are asking the question about. As much as I hate to hang you out to dry, it may be a good idea to take your issue to a local tax accountant.

 

[EagleKeeper]

Originally posted by: CPA

Originally posted by: Doggiedog
I've got a question about accountants.

I've been using the same accountant (my friend's business accountant) for several years. In the time I've used him, I have never gotten a tax refund. In fact, last year I got charged extra for unpaid NY state tax although it was only for $32.

I'm ambivalent as to whether or not I like him. I just hand him my info and he gives me back the forms. Would you recommend I change accountants and find someone new or just stick with slow and steady. The one issue I have is that I must have $500K in stock losses over the years that he knows about. Would this matter if I go to a new accountant?

Thanks.

Did you receive copies of your prior filings? You can also ask for copies of his workpapers on you. It doesn't hurt to try someone different.

If you do not have very complicated returns, you may wish to try and use Tax S/W from last year and compare it against what the accountant came up with.

The IRS will not recalculate your numbers (beyond the basic forms) to see if you made a mistake in their favor by omitting something.

If you are getting no refunds back, all paperwork is correct and accurate, and you are fully legit (no implicit meaning), then your withholding is right on.
Uncle is not getting any more of your money than is needed.

The stock losses are yours, not his. You reported them; if they are legit, then that is no reason to use some-one that you feel uncomfortable with.

If the accountant has generated special tax shelters or other manipulative schemes to hide/launder you income, then that is a different story. Neither CPA nor myself would attempt to advise you on that scenario.

 

[oog]

Originally posted by: EagleKeeper

Originally posted by: oog
if i pay the remaining part of my 2004 property taxes for my primary residence (in CA) in january 2005, do i file that part of my property taxes as a deduction on my 2004 taxes or 2005 taxes? thanks in advance.

Deductible in the year that you sign the check, not the year that the tax is for.

It looks like I did this wrong last year. What kind of corrective action should I take? Is there some correction form I should fill out for claiming 2003 property taxes paid in the 2004 calendar year as part of my 2003 deductions?

I assume that for this year I should file my 2004 taxes with all 2004 property taxes actually paid in the 2004 calendar year as well as any 2003 property taxes paid in the 2004 calendar year.

 

[CPA]

Originally posted by: oog

Originally posted by: EagleKeeper

Originally posted by: oog
if i pay the remaining part of my 2004 property taxes for my primary residence (in CA) in january 2005, do i file that part of my property taxes as a deduction on my 2004 taxes or 2005 taxes? thanks in advance.

Deductible in the year that you sign the check, not the year that the tax is for.

It looks like I did this wrong last year. What kind of corrective action should I take? Is there some correction form I should fill out for claiming 2003 property taxes paid in the 2004 calendar year as part of my 2003 deductions?

I assume that for this year I should file my 2004 taxes with all 2004 property taxes actually paid in the 2004 calendar year as well as any 2003 property taxes paid in the 2004 calendar year.

You will have to file a 1040X for 2003. And then yes, you will include those taxes paid in 2004 for 2003 in your current year filing.

 

[SarcasticDwarf]

Originally posted by: EagleKeeper

Originally posted by: SarcasticDwarf
I am 20 and have always files a 1040EZ as I am claimed as a dependant by my parents. This past year I have made (in addition to my summer job) ~$430 from Google and Comission Junction (ad sales on websites). Where should I report this? I have heard that there are two different spots it can be claimed at.

If you total income will generate no tax liability, there is a line item on the 1040 forms for misc income.

IF there is a tax liability, then you can put the extra income on a Schedule C and then deduct expenses incurred in generation of that income and/or related to it.

So could I deduct the cost of my web hosting?

 

[EagleKeeper]

Originally posted by: SarcasticDwarf

Originally posted by: EagleKeeper

Originally posted by: SarcasticDwarf
I am 20 and have always files a 1040EZ as I am claimed as a dependant by my parents. This past year I have made (in addition to my summer job) ~$430 from Google and Comission Junction (ad sales on websites). Where should I report this? I have heard that there are two different spots it can be claimed at.

If you total income will generate no tax liability, there is a line item on the 1040 forms for misc income.

IF there is a tax liability, then you can put the extra income on a Schedule C and then deduct expenses incurred in generation of that income and/or related to it.

So could I deduct the cost of my web hosting?

If it is related to income that you report, yes.

Amazing what can be stretched in terms of expenses for IT/Internet :thumbsup:

 

[gooseman]

My question:

My wife and I just purchased a new home. We closed on 12/30/2004. We do not currently itemize deductions. We normally file a 1040a with a schedule e or f (don't remember which one, I have some income from a farm that I own that is rented out).

I understand that closing costs on the new house are deductible but I don't know if it would benefit me since that would basically be the only deductions I have. (Didn't keep records of other expenses because I had not planned on purchasing a home). The loan was 120,000 so the closing costs were only around 4500.00. Should I just forget about them and go ahead and file my usual 1040a this year or would I be able to benefit from the closing costs?

Thanks in advance, you guys are great for giving your time here.

William

 

[Epoman]

Well I guess it's my turn.

1st Question

I'm worried that my wifes job screwed us on the state deductions they took out only $1.00 every 2 weeks.
She talked to Human resources and they claimed its the correct amount for what she's claiming "Married 3" but it just seems wrong.

So what's the deal? am I going to owe a couple hundred to the state this year?
I know this can't be right.

Here's the facts:

My money from SS (disabled) is non-taxable (This year atleast)
Wife makes $1,108 net every 2 weeks
We have 1 dependent under 14
Her deductions are "Married 3"

2nd Question

I thought I heard about a credit this year for people who are perm/totally disabled is that true?

Here's the link

I am 32 my wife is 31 I am disabled for the last 11 years collecting Social Security.

 

[EagleKeeper]

Originally posted by: gooseman
My question:

My wife and I just purchased a new home. We closed on 12/30/2004. We do not currently itemize deductions. We normally file a 1040a with a schedule e or f (don't remember which one, I have some income from a farm that I own that is rented out).

I understand that closing costs on the new house are deductible but I don't know if it would benefit me since that would basically be the only deductions I have. (Didn't keep records of other expenses because I had not planned on purchasing a home). The loan was 120,000 so the closing costs were only around 4500.00. Should I just forget about them and go ahead and file my usual 1040a this year or would I be able to benefit from the closing costs?

Thanks in advance, you guys are great for giving your time here.

William

You will want to use the Schedule A and itemize.

There are closing costs on the house that are deductible.
Interest on the loan, points, taxes, etc.
Those will be listed on the closing statement.
You also have your state income tax, charity expenses, Form 2106, Misc

Tax S/W will walk you through everything step by step.

 

[EagleKeeper]

Originally posted by: Epoman
Well I guess it's my turn.

1st Question

I'm worried that my wifes job screwed us on the state deductions they took out only $1.00 every 2 weeks.
She talked to Human resources and they claimed its the correct amount for what she's claiming "Married 3" but it just seems wrong.

So what's the deal? am I going to owe a couple hundred to the state this year?
I know this can't be right.

Here's the facts:

My money from SS (disabled) is non-taxable (This year atleast)
Wife makes $1,108 net every 2 weeks
We have 1 dependent under 14
Her deductions are "Married 3"

2nd Question

I thought I heard about a credit this year for people who are perm/totally disabled is that true?

Here's the link

I am 32 my wife is 31 I am disabled for the last 11 years collecting Social Security.

2nd Question
Your disability income is non-taxable.

The link states that the credit is for those that have taxable disability income.

1st Question
Without doing your taxes, you have no way to verify the information coming from the HR departments.

Best bet is to see what the tax situation looks like after you prepare the taxes for 2004.
If you there is a large discrepency either way for either the state or Fed, then adjust the W4 accordingly.

The payroll has tables that are used based on numbers provided on the W4. Sometimes those tables are incorrect or your tax situation does not match the normal table assumptions.

 

[Epoman]

Originally posted by: EagleKeeper

Originally posted by: Epoman
Well I guess it's my turn.

1st Question

I'm worried that my wifes job screwed us on the state deductions they took out only $1.00 every 2 weeks.
She talked to Human resources and they claimed its the correct amount for what she's claiming "Married 3" but it just seems wrong.

So what's the deal? am I going to owe a couple hundred to the state this year?
I know this can't be right.

Here's the facts:

My money from SS (disabled) is non-taxable (This year atleast)
Wife makes $1,108 net every 2 weeks
We have 1 dependent under 14
Her deductions are "Married 3"

2nd Question

I thought I heard about a credit this year for people who are perm/totally disabled is that true?

Here's the link

I am 32 my wife is 31 I am disabled for the last 11 years collecting Social Security.

2nd Question
Your disability income in non-taxable.

The link states that the credit is for those that have taxable disability income.

1st Question
Without doing you taxes, you have no way of verify the information conming from the HR departments.

Best bet is to see what the tax situation looks like after you prepare the taxes for 2004.
If you there is a large discrepency either way for either the state or Fed, then adjust the W4 accordingly.

The payroll has tables that are used based on numbers provided on the W4. Sometimes those tables are incorrect or your tax situation does not match the normal table assumptions.

OK thank you very much. as for question #2 next year part of my money will be taxable since my wifes income will put us over the $32,000 Maximum, So will that disabled credit apply to us? I ask because if you read the form I could not find were we fit in. Please see table 1, Page 5 of 16.

 

[EagleKeeper]

Initial read is that it will not apply.

Your AGI (Adjusted Gross INcome) will exceed the limits.

Easiest thing to do is use Tax S/W on a dummy or copied return and enter in the approriate scenarios to see what happens.

If the disability income will have the taxes automatically removed from it, then you will have to estimate that amount.

Otherwise, just boost your wife's gross income to the expected levels and see what the S/W determines will happen with the disability credit.

That is the advantage of having the S/W. You can generate what if scenarios to determine estimated tax situations of which methjod will generate the least tax liability.

 

[Engineer]

Apology if this has been covered (too lazy to read whole thread! )

A little note for people considering adjusting their withholdings via W4 for 2005: Some of the tax cuts that Bush and the Congress passed expired on Jan 1, 2005. Unless they are renewed, your tax could be higher than this year (2004). Here is a rundown of tax cuts and when they are set to expire (unless extended or made permanent):

Click me!

Child Credit: This credit will shrink from $1,000 to $700 per child on January 1, 2005.

The 10 Percent Bracket: The upper income level for this bracket will decrease by $1,000 per filer on January 1, 2005.

The 15 Percent Bracket for Joint Filers: On January 1, 2005, the upper limit of this bracket will shrink from 200 to 180 percent of the upper limit of the 15 percent bracket for single filers, creating a marriage penalty.

Standard Deduction for Joint Filers: On January 1, 2005, this will shrink from 200 to 174 percent of the standard deduction for single filers, creating a marriage penalty.

Alternative Minimum Tax: Exemptions will decrease by $6,500 per filer on January 1, 2005.

Bonus Depreciation: This provision, which changes depreciation schedules for businesses in a way that encourages investment, will expire on January 1, 2005.

Small Business Expensing: On January 1, 2006, the maximum amount that a business may deduct will fall from $100,000 to $25,000, which will not be indexed to inflation.

Capital Gains: Rates will rise to 10 or 20 percent, depending upon income, on January 1, 2009.

Dividends: Rates will rise to match standard income tax rates on January 1, 2009.

Child Credit: This credit will shrink from $700 to $500 per child on January 1, 2011.

The Income Tax: Rates will increase between 3 and 4.5 percentage points in each bracket on January 1, 2011.

The 10 Percent Bracket: The bracket will be eliminated on January 1, 2011, raising the income tax burden of many workers by 5 percentage points.

The 15 Percent Bracket for Joint Filers: On January 1, 2011, the upper limit of this bracket will shrink from 200 to 167 percent of the upper limit of the 15 percent bracket for single filers, creating a marriage penalty.

Standard Deduction for Joint Filers: On January 1, 2011, this will shrink from 200 to 167 percent of the standard deduction for single filers, creating a marriage penalty.

The Estate Tax: The top rate for this tax will increase to 60 percent on January 1, 2011, and the value of an estate exempt from taxation will shrink to $1 million, which is less than it is today.

I understand that this doesn't directly relate to 2004 taxes, but it's nice to know if you're considering changing your withholdings.

 

[b0mbrman]

Hi there. I might have already asked these but...

• I own a 4-plex and live in one of the units. How will the deductions for property tax and interest work?

• I donated a car to charity this year. Which value do I deduct?

 

[Heifetz]

I messed up my tax return for 2003. I contributed 3k to roth ira, but I didn't deduct it in my tax return. Can I still make an amendment to the return for last year now? If so, how can I do that?

Thanks

 

[Engineer]

Originally posted by: Heifetz
I messed up my tax return for 2003. I contributed 3k to roth ira, but I didn't deduct it in my tax return. Can I still make an amendment to the return for last year now? If so, how can I do that?

Thanks

You can't deduct Roth IRA payments. They are after tax. If you did need to correct something, you can amend your return with a 1040X form (not sure if you need too since you can't deduct Roth anyway).

The money you pay in is after tax and any returns on that investment is tax free if you take it out after 59 1/2 years of age.

 

[imported_Techy]

Hi and thanks for helping us!

I had to help my dad financially out this past year. I took out two personal loans (5K each) and also gave him an extra 2-3k. He's also on disablilty so can not work much, but I think he made more than allowed to be declared as a dependent on my form. Is there a place I put these expenses?

 

[techfuzz]

One more question for the tax gurus!

I input all the numbers I had into the tax SW (TaxCut) this year and everything seems to be coming up fine except when I get to the education tuition part. I received tax-free education assistance from my job that paid a percentage of my tuition expenses this past year. Where does this get entered in the SW (or on the 1040 and I'll look for it) and shouldn't I have received an additional report form from my employer (separate from the W2) that indicates these amounts?

EDIT: I think I found my own answer, but please confirm!

From Instructions for Form 8863, Education Credits (Hope and Lifetime Learning Credits):

Tax-Free Educational Assistance and Refunds of Qualified Expenses

Tax-free educational assistance includes a tax-free scholarship or Pell grant or tax-free employer-provided educational assistance.

You must reduce the total of your qualified expenses by any tax-free educational assistance and by any refunds of qualified expenses. If the refund or tax-free assistance is received in the same year in which the expenses were paid or in the following year before you file your tax return, reduce your qualified expenses by the amount received and figure your education credits using the reduced amount of qualified expenses.

So if I paid $4000 in qualified education expenses and received $2500 in tax-free employer-provided educational assistance, I would actually have only $1500 in qualified expenses which I would be able to claim. It doesn't look like there is anywhere in the tax software to enter these numbers, so I would just input $1500 and remember to attach my supporting documentation for future reference, correct?

techfuzz

 

[EagleKeeper]

Originally posted by: b0mbrman
Hi there. I might have already asked these but...

• I own a 4-plex and live in one of the units. How will the deductions for property tax and interest work?

• I donated a car to charity this year. Which value do I deduct?

Your Schedule E will cover the rental income and expenses.
Easiest way would be to take 3/4 of everything, taxes, interest, and expenses for upkeep + any direct expenses for a rental unit and put them on the Schedule E.

You can then take 1/4 of the taxes and interest on your Schedule A.
For the car, you can use the blue book value for the charity line item on the Schedule A.
Make sure that you keep a copy of what the blue book value shows to prove it if audited.

 

[EagleKeeper]

Originally posted by: Techy
Hi and thanks for helping us!

I had to help my dad financially out this past year. I took out two personal loans (5K each) and also gave him an extra 2-3k. He's also on disablilty so can not work much, but I think he made more than allowed to be declared as a dependent on my form. Is there a place I put these expenses?

If he can not be classified as an dependent, you are out of luck.

 

[EagleKeeper]

Originally posted by: techfuzz
One more question for the tax gurus!

I input all the numbers I had into the tax SW (TaxCut) this year and everything seems to be coming up fine except when I get to the education tuition part. I received tax-free education assistance from my job that paid a percentage of my tuition expenses this past year. Where does this get entered in the SW (or on the 1040 and I'll look for it) and shouldn't I have received an additional report form from my employer (separate from the W2) that indicates these amounts?

EDIT: I think I found my own answer, but please confirm!

From Instructions for Form 8863, Education Credits (Hope and Lifetime Learning Credits):

Tax-Free Educational Assistance and Refunds of Qualified Expenses

Tax-free educational assistance includes a tax-free scholarship or Pell grant or tax-free employer-provided educational assistance.

You must reduce the total of your qualified expenses by any tax-free educational assistance and by any refunds of qualified expenses. If the refund or tax-free assistance is received in the same year in which the expenses were paid or in the following year before you file your tax return, reduce your qualified expenses by the amount received and figure your education credits using the reduced amount of qualified expenses.

So if I paid $4000 in qualified education expenses and received $2500 in tax-free employer-provided educational assistance, I would actually have only $1500 in qualified expenses which I would be able to claim. It doesn't look like there is anywhere in the tax software to enter these numbers, so I would just input $1500 and remember to attach my supporting documentation for future reference, correct?

techfuzz

You are correct on the $1500.

Supporting documentation makes it difficult to E-file, other than that you are following the proper procedures.

 

[techfuzz]

Originally posted by: EagleKeeper

Originally posted by: techfuzz
One more question for the tax gurus!

I input all the numbers I had into the tax SW (TaxCut) this year and everything seems to be coming up fine except when I get to the education tuition part. I received tax-free education assistance from my job that paid a percentage of my tuition expenses this past year. Where does this get entered in the SW (or on the 1040 and I'll look for it) and shouldn't I have received an additional report form from my employer (separate from the W2) that indicates these amounts?

EDIT: I think I found my own answer, but please confirm!

From Instructions for Form 8863, Education Credits (Hope and Lifetime Learning Credits):

Tax-Free Educational Assistance and Refunds of Qualified Expenses

Tax-free educational assistance includes a tax-free scholarship or Pell grant or tax-free employer-provided educational assistance.

You must reduce the total of your qualified expenses by any tax-free educational assistance and by any refunds of qualified expenses. If the refund or tax-free assistance is received in the same year in which the expenses were paid or in the following year before you file your tax return, reduce your qualified expenses by the amount received and figure your education credits using the reduced amount of qualified expenses.

So if I paid $4000 in qualified education expenses and received $2500 in tax-free employer-provided educational assistance, I would actually have only $1500 in qualified expenses which I would be able to claim. It doesn't look like there is anywhere in the tax software to enter these numbers, so I would just input $1500 and remember to attach my supporting documentation for future reference, correct?

techfuzz

You are correct on the $1500.

Supporting documentation makes it difficult to E-file, other than that you are following the proper procedures.

I spoke with the IRS today and here's what they said about this issue.

My tuition is reported on a 1098-T which for this example states I paid $4000 in qualified tuition. I also have 3 pay-studs that show I received $2500 in tax-free employer provided educational assistance. I am to deduct the $2500 from the $4000 and enter onto Form 8863 the remainder of $1500. Then I determine the tax credit based on the $1500 which I paid with my own money. If I'm ever audited, all I need to provide are the pay-stubs (and 1098-T) showing my reimbursements for tuition paid to me by my employer.

I hope this helps someone else; this was entirely too convulated and thus another great example why our tax codes need to be re-written!

techfuzz

 

[CPA]

Originally posted by: Techy
Hi and thanks for helping us!

I had to help my dad financially out this past year. I took out two personal loans (5K each) and also gave him an extra 2-3k. He's also on disablilty so can not work much, but I think he made more than allowed to be declared as a dependent on my form. Is there a place I put these expenses?

Unfortunately, no.

 

[CPA]

Originally posted by: Engineer
Apology if this has been covered (too lazy to read whole thread! )

A little note for people considering adjusting their withholdings via W4 for 2005: Some of the tax cuts that Bush and the Congress passed expired on Jan 1, 2005. Unless they are renewed, your tax could be higher than this year (2004). Here is a rundown of tax cuts and when they are set to expire (unless extended or made permanent):

Click me!

Child Credit: This credit will shrink from $1,000 to $700 per child on January 1, 2005.

The 10 Percent Bracket: The upper income level for this bracket will decrease by $1,000 per filer on January 1, 2005.

The 15 Percent Bracket for Joint Filers: On January 1, 2005, the upper limit of this bracket will shrink from 200 to 180 percent of the upper limit of the 15 percent bracket for single filers, creating a marriage penalty.

Standard Deduction for Joint Filers: On January 1, 2005, this will shrink from 200 to 174 percent of the standard deduction for single filers, creating a marriage penalty.

Alternative Minimum Tax: Exemptions will decrease by $6,500 per filer on January 1, 2005.

Bonus Depreciation: This provision, which changes depreciation schedules for businesses in a way that encourages investment, will expire on January 1, 2005.

Small Business Expensing: On January 1, 2006, the maximum amount that a business may deduct will fall from $100,000 to $25,000, which will not be indexed to inflation.

Capital Gains: Rates will rise to 10 or 20 percent, depending upon income, on January 1, 2009.

Dividends: Rates will rise to match standard income tax rates on January 1, 2009.

Child Credit: This credit will shrink from $700 to $500 per child on January 1, 2011.

The Income Tax: Rates will increase between 3 and 4.5 percentage points in each bracket on January 1, 2011.

The 10 Percent Bracket: The bracket will be eliminated on January 1, 2011, raising the income tax burden of many workers by 5 percentage points.

The 15 Percent Bracket for Joint Filers: On January 1, 2011, the upper limit of this bracket will shrink from 200 to 167 percent of the upper limit of the 15 percent bracket for single filers, creating a marriage penalty.

Standard Deduction for Joint Filers: On January 1, 2011, this will shrink from 200 to 167 percent of the standard deduction for single filers, creating a marriage penalty.

The Estate Tax: The top rate for this tax will increase to 60 percent on January 1, 2011, and the value of an estate exempt from taxation will shrink to $1 million, which is less than it is today.

I understand that this doesn't directly relate to 2004 taxes, but it's nice to know if you're considering changing your withholdings.

Great Post!, but expect the Pres and Congress to make many of these permanent to the 2004 levels.

 

[Nuriko]

Originally posted by: Engineer

Originally posted by: Heifetz
I messed up my tax return for 2003. I contributed 3k to roth ira, but I didn't deduct it in my tax return. Can I still make an amendment to the return for last year now? If so, how can I do that?

Thanks

You can't deduct Roth IRA payments. They are after tax. If you did need to correct something, you can amend your return with a 1040X form (not sure if you need too since you can't deduct Roth anyway).

The money you pay in is after tax and any returns on that investment is tax free if you take it out after 59 1/2 years of age.

True, however there is a savers tax credit that you may be able to take if you fund a roth ira, there are some limitations like you can't be claimed as a dependent on another's tax return, can't have been a full time student for 5 months of the year and an agi limitation that starts at 15k and starts to phase out the benefits up to 25k (which is the limit).