7 Personal Tax Credits Available to You

Steve Ganns, https://gannsblog.wordpress.com, explains 7 tax credits.While not always an abundant amount, a taxpayer may, in certain situations, be eligible for credits against their taxes. The following are the most widely available credits applicable to all individuals who file taxes. In an effort to make you aware of these credits, I am providing a list of the most common ones. You can always ask your tax adviser or call us for a more in-depth explanation.

  1. Child Dependent Care Credit
    This is a credit for working single people or married couples who are employed and require an after school or daycare program to care for their children and dependents.
  2. Adoption Credit
    As the name indicates, there is a credit for the adoption expenses incurred in adopting a child. This credit, by the way, is very generous.
  3. Child Tax Credit
    Child Tax Credits are available to many taxpayers, depending on income levels, who have children under the age of 17.
  4. College Credits
    The college credits are called the American Opportunity (formerly the Hope Scholarship credit) and Lifetime Learning education credits. Based on certain criteria and income levels, each of these represents a different kind of credit for expenses paid for tuition, certain fees and course materials for higher education.
  5. Retirement Savings Contributions Credit
    This is a credit where the IRS gives a reduction in taxes based on your ability to put money into an IRA or a 401K-type account. Also dependent on income levels.
  6. Earned Income Credit
    One of the most famous and widespread among lower income taxpayers is the Earned Income Credit. This is a credit given to working persons who fall below a certain income level. Those working persons who are also supporting dependents qualify for even higher credits.
  7. Residential Energy Efficient Property Credit
    This is for energy-efficient property placed in service in a personal residence owned by the taxpayer.

The foregoing is a list of the most common credits available to taxpayers. However, as I have pointed out, many of these credits have phase-out points in income. In other words, they are not available to every taxpayer depending on the amount of money you earn. Generally, the more you earn the less these credits are available to you, but it is still good to know that they exist.

Do you think you might be eligible for any or all of these credits?  If so, please consult your tax advisor, or feel free to contact us at any time with your questions.

 

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