Tax credits are more powerful than tax deductions, so be careful to take advantage of the credits that you can qualify for. For someone in the 20% tax bracket, a $1,000 deduction would result in a $200 tax savings. But a $1,000 tax credit would reduce your tax bill by $1,000, five times what a deduction in the same amount would provide.
Child Tax Credit
Child and Dependent Care Tax Credit
Adoption Tax Credit
Earned Income Tax Credit
Premium Tax Credit
Retirement Savings Contribution Tax Credit
American Opportunity Education Tax Credit
Lifetime Learning Credit
Residential Energy Efficient Property Tax Credit
Qualified Plug-In Electric Drive Motor Vehicle Tax Credit
See related post detailing small business tax credit.
Post dated April 21, 2015
