Free 2018 Tax Planning2019-01-05T15:05:52+00:00

Free 2018 Tax Planning

Credits

Credits are deductions allowed to reduce taxes. Unlike deductions we discussed earlier, these deductions happen after your tax has been calculated. In other words, this is a direct reduction of tax due. For example if your tax is $1,000, a $700 credit will bring your taxes down to $300.

Some credits allowed on your tax return are:

  1. Foreign tax credit
  2. Credit for child and dependent care expenses
  3. Education credits
  4. Retirement savings contribution credit
  5. Child tax credit
  6. Earned income credit
  7. Residential energy credits
  8. General business credit
  9. Credit for prior year minimum tax

These credits will be discussed in more details in a future lesson.

Using the excel template

To see how these adjustments affect you personally, watch this video to see how to enter data in the template. If you do not have the template yet, you can get it here.