Tax season can be a time of both anticipation and anxiety. While filing your return and receiving a refund is always a welcome relief, there's often a lingering feeling: "Did I miss something?" The answer is often yes! Many valuable tax credits exist beyond the well-known ones, waiting to be claimed and potentially boost your refund significantly.
Tax credits are a great way to reduce your tax liability. They are subtracted directly from the amount of tax you owe, rather than reducing your taxable income like deductions do. Here are some tax credits that you might be eligible to claim.
- Earned Income Tax Credit (EITC)
The EITC is a refundable credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of the EITC depends on your income and the number of dependents you have.
- Child Tax Credit
The Child Tax Credit is available to parents of children under 17. The credit amount per child is up to $2,000, and up to $1,400 of this can be refundable.
- American Opportunity Tax Credit (AOTC)
The AOTC is a credit for qualified education expenses paid for an eligible student during the first four years of higher education. The maximum annual credit is $2,500 per eligible student.
- Lifetime Learning Credit (LLC)
The LLC is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. This credit can help pay for undergraduate, graduate and professional degree courses, including courses to acquire or improve job skills. There is no limit on the number of years you can claim the credit.
- Residential Energy Efficient Property Credit
This credit is for homeowners who make energy-efficient improvements to their homes. This includes solar electric systems, solar water heaters, geothermal heat pumps, wind turbines, and fuel cell property.
- Health Coverage Tax Credit (HCTC)
The HCTC is a tax credit that pays 72.5% of qualified health insurance premiums for eligible individuals and their families.
Eligibility for these credits depends on your individual circumstances and income level.
Claiming the right credits requires meticulous attention to detail and knowledge of specific eligibility criteria. Consulting with an experienced tax professional, like the Rascon CPA Firm or the Dimov Tax Specialists can be invaluable in ensuring you maximize your tax benefits and avoid costly errors.