When figuring up your taxes, the goal for most is to save as much money as possible. Whether you are paying out or hoping to receive a tax refund, you’ll want to maximize your savings. Here are a few tax credits you may not be aware of.

 

American Opportunity Tax Credit

This is an educational credit that was designed to replace the Hope credit. It is still available through the tax year 2017 and includes all of the first four years of college. You can claim all expenses, which includes books and supplies as well as tuition. Even if you don’t owe any taxes, you can get the first $1000 of the full $2500 back.

 

Earned Income Tax Credit

This tax credit is beneficial to single taxpayers as well as the families it was designed to help. Your income impacts your eligibility for this credit as well as the number of children in the home. If you have no children who qualify and you meet income guidelines, you can receive up to $506. For three or more children, you may receive up to $6,269. Your child must be under age 19 unless enrolled in school full-time, which extends the age to 24. You also must have an income from a business or job to qualify.

 

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Mortgage Interest Deduction

If you are buying a home, the interest you pay on the mortgage qualifies for a deduction. It only works if you itemize your deductions, but it can reduce the amount of tax you owe or provide a larger tax return. In fact, it may make the difference for whether you claim standard deductions or itemized.

 

Child Tax Credit

This is a credit for anyone with children, and it can be claimed along with the earned income credit and other credits for your children. You can receive up to $1,000 for each child that is yours. The child must be a dependent and have lived in your residence for at least half of the year. It does come with a limit for income, and the tax is nonrefundable.

 

Retirement Savings Accounts Tax Credits

The amount you contribute to your retirement can be included as a tax deduction, which could have a big impact on your taxable income. This allows you to benefit double on your investments. First, you receive tax deferral on IRA and 401k contributions. Second, you owe less in taxes because of the deduction of the amount invested. This loophole benefits most those who are able to contribute the maximum amount to their plans.

 

There are numerous other loopholes and deductions that can reduce the amount of taxable income or the amount of refund you receive. For those who are always paying taxes on their income, these deductions may make the difference between taxes owed and taxes refunded. If you are in doubt whether you qualify, you will want to talk to a tax expert who can help ensure you get all you are entitled to.

 

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