Tax Tips 2004 - Tax Credits

One thing to be looking for this year as you approach your tax forms - tax credits! Eric Tyson is co-author of taxes for Dummies:

"There are an increasing number of tax credits. Most of the these credits are targeted at non-high-income earners, people who are not wealthy. Some specifically benefit lower-income earners. So it really is in your best interest to learn about those. Those include the Earned Income Tax Credit, the higher child tax credit and there is also a relatively new tax credit for lower-income earners who make retirement plan contributions."

The child tax credit can be confusing says Tyson. Note the credit was increased to one thousand dollars in the new tax law. However, most parents got the $400 difference mailed in advance last summer, so the credit may have to be reduced by that amount when you file this time. And the credit is also reduced if you make too much income. Look for complete details in the instructions for form 1040, line 49.

Not meant to be a complete discussion of any tax subject. We are not responsible for any action taken based on this information, which is from reliable sources and believed to be accurate. See your tax advisor before taking any tax related actions.