Credits to Reduce Your Taxes

Tax Act

Credits to Reduce Your Taxes

A tax credit reduces your tax bill by the exact amount of the credit and is therefore the number #1 way to reduce your tax burden. And for some will little income, credits can actually create a refund beyond what was paid to the government for the tax year.

Child Tax Credit

For each child an individual or a couple have, they receive a tax credit of $1,000 above the $3,500 child tax exemption. There are income limits on the $1,000 credit which are $75,000 for single tax payers and $110,000 for married couples. At these two levels the credit begins to phase out. There is also an Additional Child Tax Credit that you may be eligible for if you are not eligible for the Child Tax Credit.

Earned Income Credit

For taxpayers that do not earn above certain thresholds, the earned income credit provides a large credit which often is more than what the individual paid into the federal tax revenue fund. If a taxpayer has two children and earns less than $41, 646 a year or a taxpayer has one child and earns less than $36,995 a year or a taxpayer with no children earns less than $15,880 a year, they are eligible for the credit.

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7 Comments

  1. Posted February 7, 2009 at 11:50 pm | Permalink

    We had our first child about a year ago so we are excited to get the child tax credits and the deduction you mention here.

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  2. Posted August 14, 2009 at 5:52 am | Permalink

    Tax credits is a must learn. Thank you so much..

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  3. Posted March 11, 2010 at 4:24 am | Permalink

    Good ideas to reduce your tax liability…..
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  4. Posted March 13, 2010 at 5:12 am | Permalink

    good info in regards to tax credit…

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  5. Posted March 15, 2010 at 5:22 am | Permalink

    Reducing tax liability is always a priority of many..thanks to this article…

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    Posted March 17, 2010 at 7:49 am | Permalink

    Tax credits are one of the most powerful ways to lower your taxes because they reduce your actual tax bill dollar for dollar.

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  7. Posted March 24, 2010 at 3:06 am | Permalink

    Good information on Credits to Reduce Taxes and benefit…

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