2021 is coming to a close, and with that comes a new year and a new tax season.
There are plenty of ways you might be able to decrease the amount you owe in taxes.
Filing taxes for 2022 is likely going to be confusing in comparison to previous years thanks to new laws surrounding child tax credits and stimulus payments.
That being said, there are some deductions that could offset what you owe.
Here are 5 tax credits you could claim to lower your tax bill and possibly get money back
The child tax credit is one of the most well known credits after its expansion and advanced payments in 2021.
Millions of families received 6 broken up payments of the first half of the child tax credit payments, and they can now claim the second half on their 2021 tax return.
Children under age 6 can be claimed for $3,600 while children between the ages of 6 and 17 can be claimed for $3,000.
The previous standard amount was $2,000.
Another credit available is the recovery rebate credit.
This rebate is for anyone who did not get a third stimulus check or got less than they should have despite being eligible.
The rebate can reduce any taxes you end up owing for 2021, and you’ll need to file taxes to claim it even if you do not normally file.
The American opportunity tax credit is an option for students in their first year of their college education.
A credit worth $2,500 can be claimed and requirements are that the student is working toward a degree and be enrolled at least half time.
You may not have a felony drug conviction for the year you claim the credit.
The saver’s credit used to be called the retirement savings contributions credit.
Low to moderate income households can take advantage of this credit if they’re making contributions to their 401ks or IRAs.
Finally, the child and dependent care credit has been boosted to as much as $8,000 in potential refunds.
This allow for parents to claim up to $8,000 for one child or $16,000 for two or more children.
The expenses claimed must be for things necessary to raise and care for a child.
This includes transportation, babysitters, summer camp, and other expenses.
The goal is to offset the cost of caring for a child while parents work, look for work, or go to school.
The most you can claim in one year for a tax refund is $14,300.
FingerLakes1.com is the region’s leading all-digital news publication. The company was founded in 1998 and has been keeping residents informed for more than two decades. Have a lead? Send it to [email protected].