An IRS tax credit, applied on a dollar-for-dollar basis, is a direct reduction of the income tax you owe. Unlike a tax deduction, which lowers your taxable income, a tax credit directly cuts the amount of tax you have to pay.
Because of this, tax credits can significantly impact your taxes. It might lower your tax bill or, in some cases, result in a larger refund.
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Nov 19, 2020The Earned Income Tax Credit (EITC or EIC) is a tax benefit for taxpayers with low to moderate income. It can either give you a tax refund or reduce the tax you owe. In order to qualify for this credit, you must have earned income. This can be from working, owning a business and meeting […]
adminJun 28, 2018The tuition and fees deduction allows you to deduct up to $4,000 of qualified educational expenses from your adjusted gross income. Qualifying expenses include tuition and fees for enrollment at an eligible institution for higher education that you paid for your own education, that of a spouse, or of a dependent. Personal, living, or family expenses, such […]
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