Tax deadlines are getting closer and most of us are looking for ways to reduce our taxes. One of the best ways to reduce your taxes is to look for tax credits. Tax credits will reduce your tax bill dollar for dollar. Tax deductions are great too. However, because they only reduce your taxable income, your tax benefit depends on your tax bracket. Below are some tax credits that may help reduce your tax bill if you’re eligible.
1.) Business credits. If you are a business owner there are multiple credits you may qualify for including the:
- Disabled access credit.
- Low income housing credit.
- Research credit.
- Work opportunity credit.
2.) Child credit. This tax credit is $2,000 per child, for those with dependent children under the age of 17 years old.
3.) Dependent care credit. This credit is for expenses paid for the child care of a dependent under the age of 13. Though certain other dependents may also qualify for this tax credit.
4.) Earned income credit. This tax credit is for low income taxpayers and qualifying children. The amount of this credit will depend on:
- Your earned income (whether wages or through self-employment).
- Investment income.
- Qualifying children.
- Your filing status.
5.) Education credits. These credits are for qualified college and vocational school expenses for eligible students. There are 2 education credits.
- The American Opportunity Tax Credit. This tax credit is for up to $2,000 per student. It can be claimed for tuition and fees paid during 4 years of post-secondary education.
- The Lifetime Learning Credit. This credit is up to $2,000 per family for post-secondary education expenses. It’s also used for educational expenses that will help obtain or improve your job skills.
Don’t overlook valuable tax credits. At Summit CPA we offer multiple resources to assist you with all of your tax and financial planning needs. Contact our office at 866-497-9761 to schedule an appointment with our advisors.