Common tax credits and their benefits

Filing taxes can be stressful.  With the multiple forms, the complicated language, and all of the paperwork to collect, how can you know if you are getting all the tax credits that you are eligible for?

There are a few big tax credits that could boost your income if you qualify for them:

Earned Income Tax Credit (EITC):  EITC supplements the income of working households that are making lower wages (typically under around $50,000), particularly those that have children.  The maximum credit is about $6,000. Getting the EITC depends on your household size and annual household income. You must have earned income to claim the credit.

Child Tax Credit:  This is a tax credit simply for having children.  The maximum credit is $1,000 per child.

Child and Dependent Care Tax Credit:  This credit is meant to partially reimburse child or dependent care expenses while you are at work or looking for work.

Education Tax Credit – American Opportunity Credit:  This credit of up to $2,000 can help you save on educational expenses such as tuition, fees, books, supplies and equipment for you or any member of your household.

Tax credits can create a windfall at tax time.  With some planning, you can make the most of this income—use some of it to have fun, some of it to take care of obligations like debt, and some of it to start or build savings.

Because filing taxes may be challenging, consider using a tax preparer.  To keep even more of you income, explore using a volunteer income tax assistance program commonly called VITA.  For families that qualify for the EITC, getting your income tax return prepared at a VITA site is free.  Find a free tax preparation site in your community, visit My Free Taxes or visit 2-1-1 for a referral.