| n this world, nothing is certain but death and | | | | benefits apply to you. |
| taxes", wrote Benjamin Fanklin in 1789. If we | | | | While a tax deduction is something you subtract |
| taking care of our health and be safety conscious, | | | | from your gross income to reduce your taxable |
| we may be able to outwit death until we are very | | | | income, tax credit is another tax benefits that you |
| old. But for taxes, you can't escape from paying tax | | | | can utilize to minimize you payable tax. Tax credits |
| since you start your first job, unless you are very | | | | are actually worth more to you than a deduction. It |
| poor. Hence, as a taxpayer, you need to have a | | | | reduces the amount of taxes you owe, dollar for |
| good tax planning so that you can legally minimize | | | | dollar. Thus, you better get to know the tax credits |
| your tax consequences and pay only what is due to | | | | that can apply to you. Among the tax credits for you |
| Uncle Sam, not more! | | | | to calculate in, if 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 | | | | Scholarship credit and Lifetime Learning credit. The |
| tax rate if you are living at taxable state. For | | | | Hope Scholarship credit is available for the first two |
| example if you are in the 25% tax bracket for | | | | years of college of you kids. The Lifetime Learning |
| federal taxes and you live in state that has a 5% | | | | credit is not just for kids, you can utilize this benefit |
| income tax, you total tax rate should be 30%. Thus, | | | | if you need to take courses to improve your job |
| for every $1,000 you earn, Uncle Sam has his share | | | | skills. |
| of $300 living you $700 to spend. | | | | 4. Adoption Credit |
| The dollar amount at which tax brackets occur | | | | The adoption credit is based on the cost of adoption |
| change every year because of factoring in the | | | | a child. These costs include reasonable adoption fees, |
| inflation which vary from year to year. Hence, you | | | | court costs, attorney fees, and legal fees. |
| should get the most current tax schedule and use it | | | | 5. Earned-Income Credit |
| in your tax planning. | | | | The earned-income credit is the only credit given as a |
| How To Legally Pay Less Tax? | | | | payment. The credit is applicable for low-income |
| There are many tax exemption and deductions | | | | families, usually with children. |
| benefits offer to taxpayers. You need to know the | | | | In Summary |
| benefits that apply to you so that you can get some | | | | You can not escape from paying tax; this is the price |
| "discount" from Uncle Sam and pay less | | | | of living in a civilized nation. But you can learn more in |
| legally. The deductions and exemptions if you are | | | | tax planning so that you can pay less, legally. Uncle |
| eligible will help you to reduce your taxable income. | | | | Sam will let you living in peace if you just pay what is |
| Hence, you should get a good tax planning guide | | | | due to him and you no need to pay more to make |
| which will help you to understand what are the tax's | | | | him happy. |