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Tax deductions: Here are the remaining credits that you may claim this year!

If you understand what tax deductions and tax credits are, how they operate, and how to apply for them, you can save a ton of money.

A tax deduction reduces your taxable income, so reducing your overall tax burden. When you deduct the tax deduction from your income, your taxable income lowers. Your tax liability declines as your taxable income falls.

A tax credit lowers your tax liability dollar for dollar. Certain credits are refundable, so if your tax liability is $250 but you qualify for a $1,000 credit, you will get a check for the $750 difference.

The simplified example in the table indicates that a tax credit has the potential to lower your tax burden significantly more than a tax deduction.

There are various available tax credits and deductions. Here is a drop-down list of some common ones, along with links to our other articles for further information.

Child Tax Credit

This may earn you up to $2,000 per kid for the 2022 tax year, with up to $1,500 of the credit being refundable.

Child And Dependent Care Tax Credit

It is meant to cover a portion of the cost of childcare and related expenditures for a spouse or parent who cannot care for themselves, a child under 13 years old, or another dependent while you are at work. Typically, it is up to 35 percent of costs totaling $3,000 for one dependent or $6,000 for two or more dependents.

Read more: Tax Refund 2023: Why you may receive a smaller amount compared to last year?

American Opportunity Tax Credit

If you understand what tax deductions and tax credits are, how they operate, and how to apply for them, you can save a ton of money.


This permits you to deduct 100% of the first $2,000 you spend on tuition, books, equipment, and school fees, plus 25% of the next $2,000 you spend, for a total deduction of $2,500. However, neither living costs nor transportation is eligible.

Learning Credit

You can deduct 20% of the first $10,000 you spend on tuition and fees, up to a maximum of $2,000. Like the American opportunity tax credit, the lifetime learning credit does not consider living costs or transportation to be qualified expenses. Textbooks and other instructional materials may be claimed.

Student Loan Interest Deduction

You may deduct up to $2,500 in interest paid on student loans from your taxable income.

Adoption Credit

This item covers adoption expenditures of up to $14,890 per kid for the 2022 tax year. When your modified adjusted gross income reaches or exceeds $263,410, the benefit is completely phased out and gradually reduced at specific income levels.

Read more: Tax refund: IRS advises you to create protection pin to protect yourself from scams!

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