The tax season has started therefore you need to finish your income tax filing work. First-time taxpayers should not worry about the process even though it might feel overwhelming at first. Most taxpayers find their tax liability to be less than predicted. Multiple tax credits exist to decrease your tax burden to a significant degree where you might even obtain a tax refund.
Many people are not aware of these important tax credits, causing them to miss out on the opportunity to save thousands of dollars. So, as the tax filing deadline approaches, it’s important to know which tax credits you’re eligible for and how to maximize your savings.
What are tax credits?
Taxpayers in the US generally pay taxes based on their income. If you work in a company, you get a W-2 form at the end of the year, which contains information about your total income and the tax deducted from your salary.
But did you know that some tax credits can reduce your total tax liability?
If your income falls within the taxable income, you can apply for tax credits and this can reduce your total tax amount. In some cases, it can also help you get a tax refund.
Tax credits in the US are generally designed to help people in the low and middle income groups. One of the most popular credits among them is:
Child Tax Credit
Earned Income Tax Credit (EITC)
| Number of Children | Maximum Income |
|---|---|
| No children | $19,104 |
| 1 child | $50,434 |
| 2 children | $57,310 |
| 3 or more children | $61,555 |
But many people forget to claim these credits, due to which they lose the opportunity to save thousands of dollars.
Earned Income Tax Credit (EITC) – The most important tax credit!
The Earned Income Tax Credit (EITC) is one of the most important and overlooked tax credits.
If you file as married filing jointly:
| Number of Children | Maximum Income |
|---|---|
| No children | $26,214 |
| 1 child | $57,554 |
| 2 children | $64,430 |
| 3 or more children | $68,675 |
According to reports, 1 in 5 taxpayers who are eligible for this credit do not claim it. This causes millions of Americans to lose thousands of dollars in potential tax refunds.
Eligibility Criteria for EITC
If you want to claim EITC, you must meet certain income criteria.
- Income Limits – Projected for 2025
- Single Filer – If your annual income is less than $19,104 and you do not have any children, you may be eligible for EITC.
- Married Filing Jointly – Income limits will depend on your filing status and number of children.
EITC Refund Amount
The amount of refund you get will depend on how many children you have:
| Number of Qualifying Children | Maximum Credit |
|---|---|
| No children | $649 |
| 1 child | $4,328 |
| 2 children | $7,152 |
| 3 or more children | $8,046 |
If you meet these criteria, the EITC can help reduce your tax bill or get a bigger tax refund.
Tax Filing Deadline
- Federal income tax filing deadline – April 15, 2025
If you can’t file by this date, you can request an extension until October 15, 2025.
Can you claim tax credits from previous years?
If you haven’t claimed the EITC in previous years, you have up to 3 years to ask for it back.
- Example: The deadline to claim EITC for 2021 will be April 15, 2025.
It’s best to file your taxes as soon as possible so you don’t miss out on this important credit.
Do you need help filing taxes? (Free Tax Assistance)
If you’re having difficulty filing taxes, the IRS offers free tax assistance to some people.
If you fall into any of these categories, you may be eligible for free tax help:
- Annual income – $67,000 or less
- Senior citizens – people 60 years of age or older
- Individuals with disabilities – people living with some type of disability
- Language assistance needed – people who have difficulty understanding English
You can also track your tax refund by using the “Where’s My Refund?” tool by visiting the IRS’s official website.
Conclusion – Don’t miss the chance to save money this tax season!
- The EITC is one of the biggest tax credits that people forget to claim.
If you qualify for it, don’t forget to claim it, as it can give you a tax cut or a big refund.
- If you have any doubts, you can consult a tax professional or take advantage of the IRS’s free services.
Every dollar you can save or get back can improve your financial future.
FAQs (Frequently Asked Questions)
What is the deadline to file taxes in 2024?
April 15, 2024. If you need more time, you can request an extension until October 15.
Who is eligible for the EITC?
Those whose income falls in the low to moderate range and who meet the given income criteria.
How much refund can I get from the EITC?
Filers with no children can get up to $649 and filers with three or more children can get up to $8,046.
Can I claim tax credits for previous years?
Yes, you can claim tax credits for up to the past 3 years.
Does the IRS offer free help with filing taxes?
Yes, the IRS offers free help to individuals who are not eligible to file taxes.