There are not many things that make you happy about taxes. But tax credits can help to reduce your tax liability, it is a good idea to know what credits you are eligible for and how you can claim them. By using tax credits, you reduce the amount of taxes that you owe for the tax year and some credit can be reimbursed. Although you do not have to pay taxes if you qualify for a refundable credit, you can still receive a refund. These five tax credits can help to make taxation time a bit less stressful.
Earned income credit –This credit applies to taxpayers who work but have no large salary. You can earn up to $ 6,431, which can be refunded. Things like total income, status of filing and dependents determine the eligibility for this loan. Under certain circumstances, some taxpayers who file single with no dependents may also qualify for this credit. Child and
Dependent Care Credit –This credit is available to taxpayers who benefit from care services for children under the age of 13. You can also claim this credit if you pay for the care of adults or spouses with disabilities.
Child Tax Credit–This credit reduces the liability of your child by $ 2,000. Each child must be addicted and under the age of 17. There may be additional requirements for eligibility, but this credit can help to raise children.
Saver ‘s Credit–This is available if you contribute money through your employer to an IRA or qualified retirement plan. You can qualify for this credit if your income is less than $ 60,000 per tax year.
American Opportunity Credit–This credit can help to reduce the cost of the first four years of college. If you are eligible, you can receive a credit of up to $ 2,500 if you are enrolled for a full academic term at least half a time. You must submit Form 8863, Education Credits, together with your tax return. You can qualify for this credit even if you owe nothing.