Both tax credits and tax deductions can help you minimize what you owe in taxes each year—or get more back from the IRS. In order to get the most out of your annual tax return, you need to understand the difference between these two categories.
In a nutshell:
- Tax deductions are taken from your taxable income.
- Tax credits are subtracted directly from the taxes you owe.
Common tax deductions include unreimbursed business and educational expenses, medical expenses, and charitable contributions. Meanwhile, tax credits exist to offset higher education costs, adoption expenses, child and dependent care, and more.
Taxation Solutions, Inc. can walk you through all of the credits and deductions that apply to your circumstances. We want to ensure that you’re IRS compliant while also taking full advantage of the ways in which you can reduce what you owe. In and around St. Louis, we’re known as a tax resolution company that cares. We’ll get to know you and your finances on a personal level in order to provide the best possible tax help.
Get in touch today for more information, and to book your appointment!