Tax breaks or credits were created for individuals and families that have a low income of around or below $30,000 a year. The more you make over this amount, the less chance you have of qualifying for many of the tax breaks but it will depend on your personal situation.
Below are 5 tax breaks you might be eligible for and if you qualify, they do offer middle to low income families a way to keep more of the money earned each year.
Earned Income Tax Credit– To qualify for this tax break, you must be between 25 and 65 years old, lived in the country at least six months and have a legitimate social security number. No one else can claim you as a dependent and you can file as married filing a joint return but you do not qualify if you are married filing separately.
Retirement Savings Contributions Credit– The tax break is also called the Savers Tax Credit, you might qualify for this tax break if you make a contribution to a 401K retirement savings plan or similar retirement plan.
American Opportunity Tax Credit– This tax break is an extension of the Hope Credit that will cover post-secondary education for four years to qualifying taxpayers. You cannot claim this tax break if you claim tuition and similar fees as deductions when filing taxes.
Child and Dependent Care Credit– If you take care of a family member that is physically or mentally disabled you may qualify for this tax break. You can also file for this credit if you pay for childcare for dependent children under the age of 13, while you work or while you look for a job.
The Child Tax Credit– You can reduce your federal income tax as much as $1,000 for each child you have under the age of 17, if you qualify for this tax break.
Eligibility for these tax breaks and the amount of credit you’ll receive for each one will depend on many different things such as but not limited to your adjusted gross income, number of dependents and your filing status.
Many people miss out on these tax breaks because they just assume they don’t qualify for them but you never know for sure until you try. Talk to your tax preparer to learn more about these and other tax breaks available to find out which ones you might qualify for, so you can keep more of the money you’ve earned.