Adjustments, when subtracted from total income, can dramatically reduce a taxpayer's adjusted gross income. But don't stop. Now it's credit time. While the long 1040 is the clear winner in the income adjustment sweepstakes, the 1040A offers more competition in the credits contest. Filing guidelines are in Form 2441 instructions for 1040 filers, Schedule 2 for 1040A users.
Eligibly details are in Schedule R .
Since these credits are subtracted from the amount of tax you owe, they can take your tax bill down to zero if you have enough credits. But that's as far as they go, and as such are called non-refundable credits. One other non-refundable credit provides the slim margin of victory for Form 1040 in the credit contest. It's only on the longer form that a taxpayer can get credit for foreign income taxes paid. These generally are in connection with stocks or other investment accounts, and might require completion of Form 1116 .