Question

The client would like to purchase a single-family home. Prices in the area where she would like to live are around $450,000. She has $45,000 left from the life insurance settlement and she has saved an additional $5,000. She typically saves $500 per month, but when she has unexpected expenses she is unable to save. Because she takes her children to school, she usually stops on her way to work for breakfast.

A- Earned Income Tax Credit
B- Child and Dependent Care Tax Credit
C- Energy tax credit
D- Educational tax credit

Answer 1

The relevant tax credit for the client's situation is the Earned Income Tax Credit (EITC), which provides tax credits to low-income working individuals and families.

Step-by-step explanation:

The subject of this question is related to taxes and personal finance. The client is interested in purchasing a single-family home, and the question is asking which tax credit would be applicable in her situation. Based on the information provided, the relevant tax credit would be the Earned Income Tax Credit (EITC).

The EITC is a government program that provides tax credits to low-income working individuals and families. It is designed to help reduce poverty and incentivize work. In the case of the client, who is a single parent with two children, the EITC can provide a significant credit based on her income level.

Since the client has an income level within the eligibility range for the EITC, she may benefit from the tax credit. However, it is important to consult a tax professional or utilize tax software to calculate the specific amount she may be eligible for. The EITC can help increase her overall income and potentially provide additional funds that can contribute towards the purchase of a single-family home.