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Tax credits can directly reduce the amount of tax you owe, making them one of the most valuable parts of a tax return. Unlike deductions, which reduce taxable income, tax credits reduce your bill dollar for dollar. Here is an example: Let’s say a taxpayer owes $3,000 in federal taxes after their income and…
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When filing a tax return, many focus on the obvious deductions and end up overlooking others that could reduce their taxable income. While not every deduction applies to every taxpayer, being aware of commonly missed deductions can help ensure your return is accurate and complete. Below are 10 commonly missed tax deductions people often…
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Your filing status is one of the most important parts of your tax return. It affects your tax rate, standard deduction and eligibility for certain credits. Choosing the correct status helps ensure your return is accurate and avoids any possible issue later on. What Is a Filing Status? Your filing status is based on…
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When Filing your taxes, one important decision is choosing between the standard deduction vs. itemized deductions. Understanding the difference can help reduce your taxable income and avoid overpaying on your tax return. What Is the Standard Deduction? The standard deduction is a fixed dollar amount set by the IRS that reduces your taxable income.…