| "In this world, nothing is certain but death and | | | | apply to you. |
| taxes", wrote Benjamin Fanklin in 1789. If we | | | | While a tax deduction is something you subtract from |
| taking care of our health and be safety conscious, we | | | | your gross income to reduce your taxable income, tax |
| may be able to outwit death until we are very old. But | | | | credit is another tax benefits that you can utilize to |
| for taxes, you can't escape from paying tax since you | | | | minimize you payable tax. Tax credits are actually |
| start your first job, unless you are very poor. Hence, | | | | worth more to you than a deduction. It reduces the |
| as a taxpayer, you need to have a good tax planning | | | | amount of taxes you owe, dollar for dollar. Thus, you |
| so that you can legally minimize your tax | | | | better get to know the tax credits that can apply to |
| consequences and pay only what is due to Uncle | | | | you. Among the tax credits for you to calculate in, if |
| Sam, not more! | | | | applicable are: |
| Understanding Your Tax Bracket | | | | 1. Dependent & Childcare Credit |
| The more money you make, the more you pay in | | | | The dependent and childcare credit is available if you |
| taxes. Your tax brackets increase as your income | | | | work outside your home or are full-time student. The |
| increase. In additional, you loss some of you tax | | | | expenses must be for dependents under age 13 or |
| advantages, such as exemptions of dependents, that | | | | any person who is mentally incapable of care for |
| are phased out as your income increase. | | | | themselves and they must be qualified as your |
| Beside the federal government tax which is unable to | | | | dependent. |
| be escaped for all taxpayers, if you live in state that | | | | 2. Child Tax Credit |
| also taxes you income, you need to pay for state | | | | If you enjoy this benefit if you have children being |
| government tax if applicable. There are seven | | | | supported by if they are under age 17. |
| tax-free states in United States: Alaska, Florida, | | | | 3. Education Credits |
| Nevada, South Dakota, Washington and Wyoming. | | | | There are two types of education credits, the Hope |
| Hence, you should aware and plan in the additional tax | | | | Scholarship credit and Lifetime Learning credit. The |
| rate if you are living at taxable state. For example if | | | | Hope Scholarship credit is available for the first two |
| you are in the 25% tax bracket for federal taxes and | | | | years of college of you kids. The Lifetime Learning |
| you live in state that has a 5% income tax, you total | | | | credit is not just for kids, you can utilize this benefit if |
| tax rate should be 30%. Thus, for every $1,000 you | | | | you need to take courses to improve your job skills. |
| earn, Uncle Sam has his share of $300 living you $700 | | | | 4. Adoption Credit |
| to spend. | | | | The adoption credit is based on the cost of adoption a |
| The dollar amount at which tax brackets occur | | | | child. These costs include reasonable adoption fees, |
| change every year because of factoring in the inflation | | | | court costs, attorney fees, and legal fees. |
| which vary from year to year. Hence, you should get | | | | 5. Earned-Income Credit |
| the most current tax schedule and use it in your tax | | | | The earned-income credit is the only credit given as a |
| planning. | | | | payment. The credit is applicable for low-income |
| How To Legally Pay Less Tax? | | | | families, usually with children. |
| There are many tax exemption and deductions | | | | In Summary |
| benefits offer to taxpayers. You need to know the | | | | You can not escape from paying tax; this is the price |
| benefits that apply to you so that you can get some | | | | of living in a civilized nation. But you can learn more in |
| "discount" from Uncle Sam and pay less | | | | tax planning so that you can pay less, legally. Uncle |
| legally. The deductions and exemptions if you are | | | | Sam will let you living in peace if you just pay what is |
| eligible will help you to reduce your taxable income. | | | | due to him and you no need to pay more to make him |
| Hence, you should get a good tax planning guide which | | | | happy. |
| will help you to understand what are the tax's benefits | | | | |