Know Your (Income) Limits
IRS rules dictate that some tax credits and deductions have income limits. Make too much money, and it’s no tax credit for you. Here are the major tax credits and deduction with their associated income limits. Where appropriate, numbers reflect the point at which phase-out begins. All numbers are for 2006. I’ll update after 2007 numbers are published.
Child tax credit ($1,000 credit per dependent child)
- Married filing jointly: $110,000
- Married filing singly: $55,000
- All others: $70,000
Lifetime learning credit (up to $2,000 credit per tax return)
- Married filing jointly: $90,000
- All others: $45,000
Hope scholarship credit (up to $1,650 credit per student)
- Married filing jointly: $90,000
- All others: $45,000
Student loan interest deduction (up to $2,500 deduction)
- Married filing jointly: $100,000
- All others: $50,000
Traditional IRA (deduction up to yearly maximum contribution - currently $4,000)
- Married filing jointly: $75,000
- Single: $50,000
Roth IRA (informational only - no deduction or credit)
- Married filing jointly: $156,000; cannot contribute to Roth IRA if over this amount
- Single: $ 99,000
- Married filing single: Cannot contribute to Roth IRA
