Are you looking to conserve money on your taxes? To maximize your tax savings, check your eligibility for tax credits. Tax credits directly lessen your tax bill, while deductions lessen your taxable income and for that reason conserve money in proportion to your tax rate. Refundable credits are even more valuable, since you can receive your credit even when it is beyond the amount of the fees you owe. Non refundable credits are good only up to the total limit of taxes that you owe. Look over these seven popular tax credits and see if they’re likely to apply to you, in either filing this year’s or next year’s taxes.
Earned income tax credit – The EITC has helped many low income families through the years. Not only is it a refundable tax credit, it’s also the only credit that may be claimed when using Form 1040 EZ. To claim the EITC, you must be a U.S. Citizen with a few earned income, a SSN, and investment income of less than $3, 450 for the year. You cannot claim the EITC under married filing separately status. For tax year 2017, EITC income limits with no qualifying kids are $15, 010 for single filers and $20, 600 for couples filing jointly.
The income limits scale with the number of qualified children until reaching $48, 340 singles\/$53, 930 couples at three qualifying children. Credits vary from $510 with no qualifying kids to $6, 318 with 3 or more qualifying children. Child tax credit – A basic non refundable kid tax credit of up to $1, 000 per kid is available this tax season if your kid meets the criteria in seven aspects age, relationship, support provided, dependency, citizenship, residence time in your home for the year, and family income. The latest Tax Cuts and Jobs Act doubled the kid tax credit to $2, 000 through 2025 to partially offset the loss of personal exemptions.
This change will be applicable to your 2018 taxes filed in Apr 2019. Income phaseouts were also significantly increased through 2025 by the new tax law. They begin at an adjusted gross income of $200, 000 for single filers and $400, 000 for married filing jointly. If you do not owe enough in taxes to claim your full Child Tax Credit, you might qualify for the refundable Additional Child Tax Credit that permits you to claim the difference up to $1, 000. Use Internal revenue service Form 8812 to see if you qualify. Non kid dependent credit – A brand new $500 non refundable credit covers dependents who do not qualify for the kid tax credit, like kids who’re age 17 and above or dependents with some other relationships .