Line 20 refers to Schedule 3 which is to be filled out if you have additional credits that aren’t listed directly on the 1040, such as adoption credits and residential energy credits. Part I lists nonrefundable credits, credits that reduce the amount of taxes owed, but no more. Part II lists other payments you
have already paid in and refundable credits, which are credits you will receive above and beyond your tax liability. Amounts from line 8 of Schedule 3 are to be entered on line 20 of your 1040 and amounts on line 15 of Schedule 3 are to be entered on line 31.
For line 21, just follow the prompts and add lines 19 and 20 together and enter the total. This is the total amount of credits you get to help reduce or eliminate your tax liability. This is a good thing! Subtract that amount from line 18 and enter the amount on line 22. If zero or less, just enter -0-.
It’s a good idea to review Schedule 3 each year to see if there are additional credits that you may qualify for that you may not have been aware of. For example, did you know there is a credit specifically for District of Columbia first-time homebuyers? Pretty cool, very specific, but cool. If you discover you
qualify for a credit, then you will probably have to fill out another form…for you know who’s leisurely reading pleasure. As always, if you are unsure if you qualify for a credit, contact your reputable tax professional to have your taxes filed professionally and accurately.
Schedule your next tax appointment with Angie Love’s Taxes.
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