Maximize Your Savings with the Top 5 Tax Credits for Americans in 2023
Introduction
If you want to keep more of your money in your pocket instead of sending it to Uncle Sam, you need to maximize your tax credits. Unlike tax deductions, which reduce the amount of income that's considered taxable, tax credits offer a dollar-for-dollar reduction in what you owe. In other words, if you get a $100 tax credit, you'll owe $100 less in taxes. Some tax credits are even refundable, which means that if you're owed money when you file your return, you can receive the credit as a tax refund.
Top 5 Tax Credits for Americans in 2023
- Adoption credit: Up to $15,950, nonrefundable, can be carried forward for up to five years.
- EV tax credit: Up to $7,500 for new EV purchases and $4,000 for used EV purchases.
- Earned Income Tax Credit (EITC): Up to $7,430, ranges from $600 to $7,430 based on family size.
- Solar tax credit: Up to 30% of qualifying home improvement costs, nonrefundable.
- Child Tax Credit: Up to $2,000 per qualifying child, $1,600 refundable credit known as the Additional Child Tax Credit.
Filing taxes is never fun. But tax credits can ease your burden at tax time and could even help you score a refund.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.