Tax Credits & Deductions

You can save money by taking advantage of every tax credit and deduction available to you. Credits provide a dollar-fordollar reduction of your income tax liability; that is, a $1,000 tax credit actually saves you $1,000 in taxes
Deductions, on the other hand, lower your taxable income. For example, if you are in the 22% tax bracket, a $1,000 deduction saves you $220 in tax, which is $780 less than the savings with a $1,000 tax credit. Let’s take a look at some valuable credits and deductions.

Child Tax Credits - SECURE Act Update

Under the Tax Cuts and Jobs Act of 2017, parents with dependent children under age 17 are entitled to claim a tax credit of up to $2,000 and up to $1,400 can be refundable. The credit starts to phase out for taxpayers with adjusted gross income (AGI) of more than $200,000 for single filers and $400,000 for joint filers.
Those who adopt a child can receive a tax credit of up to $14,300 for qualified adoption expenses in 2020, subject to income limitations (see page 11). Those adopting a child with special needs may claim a $14,300 tax credit in the year the adoption is completed, even if they do not have qualified adoption expenses.

To see if you qualify for the 2020 Income Tax Phaseout Ranges click here.