Americans can increase their tax refunds by looking for tax credits, as inflation remains high. Tax credits can reduce the amount of income tax you owe to federal and state government entities. Check if you are eligible for any of these credits and review your expenses to help lower your tax bill.
Earned Income Tax Credit is a credit for low-income taxpayers, the credit varies based on the number of children, based on an article published by The National Conference of State Legislatures on August 16, 2022. Eligible taxpayers with no children can receive up to $600 credit. The credit amount increases with each additional child, up to $7,430 for 3 or more children.
Saver’s Credit, as mentioned in an article published by Nerd Wallet on October 28, 2022, is a tax credit for low-income taxpayers for their retirement account contributions. It offers a credit of up to 50%, and the maximum credit amount varies by income level, capped at $36,500 for single filers and $73,000 for joint filers.
The Child Tax Credit is $2,000 per qualifying child, not adjusted for inflation, according to Nerd Wallet on an article published on January 6, 2023. Eligibility for the full credit depends on the modified adjusted gross income.
The Adoption Credit is $15,950 per adopted child, obtainable after finalizing adoption and claiming the child as a dependent, as mentioned in an article published by Adopt Help.
IRS stated in an article published on September 14, 2022 that in credit for the elderly and disabled, taxpayers aged 65 or older or those retired on permanent total disability can claim up to $7,500 in credits.
The lifetime learning credit is available for eligible students pursuing undergraduate, graduate, and professional degrees, according to Investopedia.
The American Opportunity Tax Credit (AOTC) is a tax credit of up to $2,500 per eligible student that helps fund first 4 years of post-high school education, Benefits.gov’s website reads.
A tax credit of up to $7,500 is available for electric vehicles purchased in 2021, according to Need Wallet on January 3, 2023.