Finance Tax

10 Amazing Tips For Credit Tax

Published at 02/20/2012 23:47:16


Many people become confused when it comes to filing taxes and are unsure about what a credit tax is. A credit tax is simply a reduction in the amount of tax that you owe. Many people choose to file their own taxes through the use of online software such as TurboTax or they go the route of hiring a tax preparer to take care of their taxes. Either way you will want to be sure to claim any credit tax that you are entitled to.

Step 1

You can claim many tax credits for family. The child tax credit is one you can claim if you have children. For each qualifying child you can claim $1,000. For a child to qualify they must be 16 or younger on December 31, a dependent of yours, a US citizen, must be related to you and must have lived with you for at least six months.

The child and dependent care care tax credit is different from the child tax credit. This credit is for those who have to pay someone else to take care of their child in order to work. There is a tax credit for the elderly and disabled. You must be 65 years or older or if retired must be on permanent disability and have disable income that is taxable.

Step 2

Another type of tax credit you can claim is work and job related. The earned income tax credit is geared for lower income to moderate income families. This tax credit can lower your taxes and result in receiving a refund.

The saver's credit is a tax credit that used to be known as the Retirement Savings Contribution Credit. This credit is for middle income people to save for their retirement. The saver's credit could save you up to $1,000 on taxes and $2,000 for married filed jointly. The amount of the credit will depend on a few factors from your filing status, income and qualifying contributions. The foreign tax credit is for those individuals who has earned income outside of the United States. This credit will help alleviate some of your tax burden from being taxed from two countries.

Step 3

Being a homeowner a person can claim tax credits related to their house. You can receive a tax credit for energy efficient and home improvements. Here are a few examples of credits you can receive: $300 for biomass stoves, $300 for air source heat pumps, $300 for central air conditioning, $300 for gas, oil, propane or electric heat pump water heaters, $500 for metal or asphalt roofing, $500 for insulation

Step 4

Find savings on your taxes with an education tax credit. Two credits are available for students, the American Opportunity Credit and the Lifetime Learning Credit. A student can not claim both credits during the same tax year. Both credits offer the student different advantages.

Step 5

Another great tax credit a person can claim are charity non-cash contributions. You can claim a tax credit for items you have donated to charity from clothing to household goods. Just be sure that whatever items you donate before leaving that you get some type of receipt in case you are audited from the IRS.


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