Top 5 Individual Tax Credits and Deductions

Part 1 Tax credits and deductions can lower your tax bill

substantially each year. Claiming any of these tax breaks can enhance your refund. In this presentation we will cover the top 5 credits that can help you to maximize your tax refund.

Earned Income Tax Credit

The EITC or EIC can be claimed by working people who have low to moderate income. Even if you do not owe any taxes, you can still claim this tax credit by filing a return and getting a refund.

American Opportunity and Lifetime Learning Tax Credit

These two education tax credits help parents and students meet the cost of higher education. The maximum credit allowed under the American Opportunity Tax Credit in a year, per student, is $2,500. For the Lifetime Learning Credit, the maximum credit limit is $2,000 per eligible student.

Child and Dependent Care Credit

If you are paying for childcare to allow you to work or look for work, then you can claim this tax credit to lower your taxes. The dollar limit on the amount of expenses you can use to calculate the credit is $3,000 for one qualifying individual.

Adoption Credit

This is a nonrefundable tax credit designed to lower qualified adoption expenses necessary to adopt an eligible child. If you adopt a child with special needs, you can use this credit even if you do not haveany qualified expenses.

Saver’s Credit

If you make less than $60,000 and contribute to an IRS or your employer- sponsored retirement plan, you may be able to deduct a portion of your contributions.

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