Ask anyone and they will surely tell you they pay too much in taxes. Fortunately, the federal government and many states have responded by creating a means to rebate taxes in the form of \u201ctax credits.\u201d<\/p>\n
Tax credits<\/a>\u00a0do not reduce your taxable income; they actually reduce the amount of tax that you owe. In some cases, a tax credit can reduce your tax liability to beyond zero, with the extra amount given to you as a\u00a0tax refund<\/a>\u00a0(known as \u201crefundable credits<\/a>\u201d).<\/p>\n There are a variety of tax credits available today that are designed to help people qualify for financial relief. Whether you are buying a home for the first time, raising children, pursuing an education for your child or yourself, are elderly or disabled, or you\u2019re simply trying to stretch your dollars, there may be a suitable tax credit for you.<\/p>\n Here are some examples of popular federal tax credits:<\/p>\n The\u00a0American Opportunity Tax Credit (AOTC)<\/a>\u00a0provides a maximum $2,500 credit for each student pursuing a degree, for up to four years of post-secondary education. The\u00a0Lifetime Learning Credit (LLC)\u00a0offers a tax credit of up to $2,000 for qualified education expenses. Note that the student may elect to receive only\u00a0one\u00a0education tax credit and certain income limitations apply. For more information, see\u00a0Education Tax Breaks for Your Federal Return<\/a>.<\/p>\n The Child Tax Credit\u00a0is a refundable tax credit that\u2019s available to any parent with a qualifying child. You may be able to claim this credit if you have a child under age 17 and you meet other IRS requirements. This tax credit is worth up to $2,000 for each qualifying child with a Social Security Number (SSN) issued by the Social Security Administration. For more information, see\u00a0The Child Tax Credit<\/a>.<\/p>\n The popular First-Time Homebuyer Tax Credit expired in April 2010. However, if you purchased a home in 2008, 2009, or 2010 and you never claimed this credit, you might still be able to. Note that the home must be your primary residence and eligibility varies depending on the year you purchased.<\/p>\n The Low Income Housing Tax Credit (LIHTC) program started in 1986 under President Reagan. It provides incentive for private sector investments in affordable rental housing. Like all tax credits, the LIHTC gives you a dollar-for-dollar reduction of your income tax liability.<\/p>\n The\u00a0Earned Income Tax Credit (EITC)\u00a0was created to help workers and families with modest incomes by reducing the amount of tax they owe and, in many cases, providing a\u00a0tax refund<\/a>. The amount you are eligible to claim depends on your filing status and the number of qualifying dependents you have. For more information, see\u00a0What You Should Know About the Earned Income Credit<\/a>.<\/p>\n If you are age 65 or older, or disabled, you may be able to claim the \u201cCredit for the\u00a0Elderly or the Disabled\u201d on your\u00a0federal income tax return<\/a>. To qualify as disabled for the purposes of this credit, you must be retired, permanently and totally disabled, and receiving taxable disability benefits. The amount for this tax credit ranges between $3,750 and $7,500. For more information, see\u00a0IRS Publication 524 (Credit for the\u00a0Elderly or the Disabled)<\/a>.<\/p>\nEducation Tax Credits<\/h3>\n
Child Tax Credits<\/h3>\n
Housing Tax Credits<\/h3>\n
The Earned Income Tax Credit (EITC)<\/h3>\n
Tax Credits for the Elderly and Disabled<\/h3>\n