Four Credits That Can Pay You at Tax Time:
Mr. IRS please help me. I need a refund because my gross habits exceeded my net income. Are there any credits available that can help me? Funny you should ask. The IRS published this list of 4 Credits That Can Pay You at Tax Time:
Four Credits That Can Pay You at Tax Time
Did you understand what a refundable credit is? A non-refundable credit can be used only to reduce taxes owed to the IRS. In other words they can only help to reduce your taxes on your 1040 to zero. If you paid in money to the IRS this can result in a refund to the extent that you paid taxes in to the IRS. On the other hand, a refundable credit can generate a refund even beyond any taxes you paid in during the year. So with a refundable credit even if you owed no tax you could still get money back beyond what you paid in.
Another example of a refundable credit, not mentioned in the IRS Tips above, is from the American Opportunity Credit for tax years 2009 and 2010. These are helpful credits related to paying for post-secondary education. For more information about this credit see my previous post – Education Credits – American Opportunity Credit.
To have an experienced CPA help you prepare your tax returns and help you reach your goals contact me at the phone number below.
Jeff Haywood, CPA
I prepare the following types of tax returns:
Federal and State Returns
Also, I am available for tax planning and discussions about business, retirement planning and life goals.
For more US income tax content see the following links:
10 Things to Know About the Child and Dependent Care Credit
10 Important Facts About Capital Gains and Loses
IRS: Beware of Tax Scams
IRS Top Ten: Mortgage Debt Forgiveness
IRS Top Ten: IRA Contributions
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4 Credits That Can Pay You at Tax Time
What Business Deductions Can I Take as an Employee? IRS Tax Tips.
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6 IRS Tax Tips for Self-Employed Individuals
Important IRS Tax Tips: Health Insurance Tax Breaks for the Self-Employed
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Education Credits-American Opportunity Credit
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As always keep in mind that the content provide on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in both Texas and Illinois.
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.