A tax credit can help lower you what you owe to the government when paying taxes or even increase any refund that you’re owed. Many taxpayers fail to take advantage of the credits they’re eligible for. As a result, they end up paying more for their taxes than is necessary. Below are several examples of tax credits, including explanations of how they work and how to tell whether they apply to you.

Earned Income Credit (EIC)

The EIC is based on how many kids you have and how much money you make. This credit applies to people who earn less than $55,000 per year and have very little money coming in from investments. Married individuals who wish to qualify for the EIC must also be filing jointly, as there are different limits for single and married filers. The EIC can also mitigate adoption costs. 

Lifetime Learning Credit

The Lifetime Learning Credit applies to any post-secondary learning institution, from undergraduate to postgraduate work. Single filers must make $57,000 or less to qualify, while married filers must make $114,000 or less. The credit can provide as much as $2,000 depending on the student's exact situation. It can also be used to decrease learning costs for education taking place outside of colleges and universities. 

Savers Tax Credit

If you regularly contribute to a retirement account, such as a 401(k), you can receive a little help from the Savers Tax Credit. This provides a $1,000 and $2,000 credit to single and married filers respectively, provided they fall within the income range. People married filing jointly only qualify if they earn $63,000 or less, while single filers can earn more than $31,500 and claim the credit. 

If you have questions about tax credits in Sparta, WI, Simplified Tax will help you find the ones you qualify for. These accountants can handle tax preparation for businesses and individuals, and they also offer many other financial services. This includes help with wills and estates, retirement planning, QuickBooks training, and payroll services. Schedule a consultation by calling (608) 269-2633 today. You can also visit their website to learn more about the services they offer.