Everyone could use a few more tax breaks, some of these listed measures can really pay off if you qualify.
Child and Dependent Care Credit
If you pay for a babysitter or childcare while you’re at work, or if you have someone look after your sick spouse while you’re away for work, the Child and Dependent Care Credit can pay you back for at least part of these expenses. The coverage includes care for your child, spouse or a dependent while you were working or looking for work. The person you paid cannot be a spouse, the parent of the person being cared for, or one of your dependents.
The credit is worth：
- up to 35 percent of the qualified costs for care,
- up to $3,000 for one child or dependent,
- $6,000 for the care of more than one person.
Child Tax Credit
Taxpayers with a dependent child under age 17 have tax credit up to $2,000 for each qualifying child, in addition to the regular exemption for the dependent. Plus, there’s a $500 credit for dependents who are 17 or older.
Earned Income Tax Credit (EITC)
The EITC (or EIC) is for low- and moderate-income taxpayers. It’s available to working families as well as single working taxpayers who qualify. To qualify, you have to be earning money somehow, either from wages or self-employment. The amount of the credit varies with the amount of income, the number of qualifying dependents and the age of the taxpayer.
This credit gives taxpayers who are saving toward retirement a credit of up to $1,000 (twice that for married couples). You qualify by contributing to a qualified retirement plan such as a 401(k) or IRA.
There’re several tax credits for education.
1. The American Opportunity Tax Credit is for expenses for the first four years of college, and the college has to be a qualifying institution.
2. The Lifetime Learning Credit is for a post-graduate degree, or a taxpayer who takes courses over a number of years.
3. The tuition and fees deduction is for taxpayers who don’t qualify for the above credit.
Other than cash or property contributions to a qualified charity or non-profit organization, you might be able to deduct expenses from volunteering. That means the expenses occurred when you do the charity work, including the supplies you buy, the gasoline you paid during the charity work, but you cannot deduct the worth of your volunteer labor.
Gambling Losses Deduction
All your gambling winnings are taxable, but you can deduct some of your losses to offset winnings. Deductible losses are limited to the amount of your winnings. So if you lost $2,000 to win $500 on the slot machines, for example, you’ll declare the $500 as income – and can claim $500 in losses as a deduction.