Check it out! You might be eligible for a tax credit. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are even refundable. That means you might receive a refund rather than owe any taxes.

Here are five popular credits you should consider before filing your 2008 Federal Income Tax Return:

1. The Earned Income Tax Credit is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the credit. For more information, see IRS Publication 596, Earned Income Credit.

2. The Child and Dependent Care Credit is for expenses paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent, to enable you to work or look for work. For more information, see IRS Publication 503, Child and Dependent Care Expenses.

3. The Child Tax Credit is for people who have a qualifying child. The maximum amount of the credit is $1,000 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses. For more information on the Child Tax Credit, see IRS Publication 972, Child Tax Credit.

4. The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is designed to help low- and moderate-income workers save for retirement. You may qualify if your income is below a certain limit and you contribute to an IRA or workplace retirement plan, such as a 401(k) plan. The Saver’s Credit is available in addition to any other tax savings that apply. For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs).

5. Health Coverage Tax Credit Certain individuals, who are receiving certain Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit when you file your 2008 tax return.

There are other credits available to eligible taxpayers. Since many qualifications and limitations apply to the various tax credits, taxpayers should carefully check their tax form instructions, the listed publications, and additional information that is available on the IRS Web site at IRS.gov. IRS forms and publications are also available by calling 800-TAX-FORM (800-829-3676).

Links:

• 1040 Central
• Publication 596, Earned Income Credit (EIC) (PDF 281K)
• Publication 972, Child Tax Credit (PDF 128K)
• Publication 503, Child and Dependent Care Expenses (PDF 167K)
• Publication 524, Credit for the Elderly and Disabled (PDF 140K)
• Publication 970, Tax Benefits for Education (PDF 368K)
• Publication 590, Individual Retirement Arrangements (IRAs) (PDF 449K)
• Form 1040 Instructions (PDF 1,101K)

Source: irs.gov

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AskTaxGuru - Free Tax Resource

Hello,
you have shared a very useful information regarding the tax issues which is highly appreciable and useful for us.

Thanks for updating me with these recommended information.

Nice post very informative and useful to us regarding tax issues

Hello,
I have the following case: I (39years) and my family – my husband (42years) and our child (7years) held a green cards from lottery DV 2013. We are from Bulgaria and arrived in Phoenix, Arizona on October-13-2013.
According to the Publication 514, we choose to be treated as a U.S. resident for the entire year .What does that mean?
Provided that we have not lived all year in the U.S., can we apply for:
- standard deduction for the entire 2013
- Child Tax Credit
- Earned Income Credit
- Foreign Tax Credit for declared our income here from wages received in Bulgaria for that we taxed in Bulgaria
I ask for your help. Thank you.

Credits can have a real impact on income. It's crazy to think that anyone would give up a chance to pay fewer taxes or pass up a refund from the Internal Revenue Service.Tax credits can significantly lower your tax liability. Credits are more impactful than deductions, which reduce your taxable income ? typically, a dollar of a deduction reduces your tax by only about 25 percent.

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