There may be additional increments in between the upper and lower limits that are used to determine what amount of a specific tax credit a taxpayer may be eligible for based on their reported income for the tax year.
Since these tax credits are targeted toward taxpayers in a specific income bracket, above a certain income threshold, the amount of the tax credit is reduced. Preferential treatment in the tax code phases out for higher-income taxpayers; once a taxpayer surpasses a certain income level, the tax credit is no longer available to them.
The application of a phase out occurs with several different tax credits that are made available to taxpayers by the IRS. If their AGI falls below this number, they may claim the full amount of the tax credit. If it falls above this limit, the credit gradually reduces until their income reaches the income limit. The American Opportunity Tax Credit is intended for taxpayers with qualified education expenses. Tax Policy Center. Internal Revenue Service. Accessed Feb.
Income Tax. Roth IRA. Your Money. Personal Finance. Your Practice. Popular Courses. What Is a Phase Out?
A particular stage in a periodic process or phenomenon. The fraction of a complete cycle elapsed as measured from a specified reference point and often expressed as an angle. Chemistry a. Any of the forms or states, solid, liquid, gas, or plasma, in which matter can exist, depending on temperature and pressure. A discrete homogeneous part of a material system that is mechanically separable from the rest, as is ice from water. Biology A characteristic form, appearance, or stage of development that occurs in a cycle or that distinguishes some individuals of a group: the white color phase of a weasel; the swarming phase of locusts.
To plan or carry out systematically by phases. All rights reserved. Switch to new thesaurus. Based on WordNet 3. References in periodicals archive?
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