In an effort to reduce their tax liability, taxpayers can use qualifying deductions and credits. There are various tax breaks available to both taxpayers and businesses. Some of the common ones that millions of taxpayers qualify for are The Earned Income Tax Credit (EITC), and Child and Dependent Care Credit.
The Earned Income Tax Credit also known as the EIC can be claimed even if you do not owe taxes or are required to file. In order to take advantage of this credit, a tax return has to be filed. The credit allows you to save on taxes if you have earned income from self-employment, employment, or another source, and meet certain other requirements.
The Child and Dependent Care Credit allows working parents and guardians to save on taxes. Parents can take a credit for childcare expenses paid throughout the year. Those who are actively seeking work while leaving the child with a care provider can also qualify for this tax break.
In addition to these credits, there are various deductions that can be taken. Some of these include home mortgage interest, charitable contributions, and certain other qualifying expenses. When claiming a deduction or a credit, it’s important to ensure that you qualify for it.