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, which allow a maximum deduction of $4,000, expired after the 2020 tax year. This means you cannot claim this specific deduction for tax years 2021 and later unless Congress extends it again. For Tax Years 2020 and Prior The tuition and fees deduction is still applicable for the tax years 2020 and […]
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