Tax credits are one way the government helps its citizens financially.
But what is it really and does it impact my refund?
What is a Tax Credit?
A tax credit is an money that taxpayers can subtract from the taxes they owe. Deductions lower the amount of taxable income, but tax credits are different. These reduce the actual amount of tax owed. Find more information on it here.
There are different types of tax credits, from Child Tax Credit, Daycare Tax Credit, American Opportunity Tax Credit, and Medical and Dental Expenses Tax Credit.
The value of the credit depends on what type it is. Certain types are given to individuals and other to businesses. Locations, classifications, or specific industries may impact the value of the credit as well.
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