Tax credits and deductions change the amount of a person\u2019s tax bill or refund. People should understand which credits and deductions they can claim and the records they need to show their eligibility.
\nTax credits
\nA tax credit reduces the income tax bill dollar-for-dollar that a taxpayer owes based on their tax return.
\nSome tax credits, such as the Earned Income Tax Credit, are refundable. If a person\u2019s tax bill is less than the amount of a refundable credit, they can get the difference back in their refund.
\nTo claim a tax credit, people should:
\n\u2022 Keep records to show their eligibility for the tax credits they claim.
\n\u2022 Check now to see if they qualify to claim any credits next year on their tax return.
\nDeductions
\nDeductions can reduce the amount of a taxpayer’s income before they calculate the tax they owe.
\nMost people take the standard deduction. The standard deduction changes each year for inflation. The amount of the standard deduction depends on a taxpayer’s filing status, age and whether they’re blind and whether the taxpayer is claimed as a dependent by someone else.
\nSome people must itemize their deductions, and some people may choose to do so because it reduces their taxable income more than the standard deduction. Generally, if a taxpayer’s itemized deductions are larger than their standard deduction, it makes sense for them to itemize.
\nInteractive Tax Assistant
\nFind help with tax questions based on specific circumstances with the Interactive Tax Assistant. It can help a person decide if they\u2019re eligible for many popular tax credits and deductions.
\nMore information:
\n\u2022 Tax credits for individuals: What they mean and how they can help refunds
\n\u2022 Deductions for individuals: What they mean and the difference between standard and itemized deductions<\/p>\n","protected":false},"excerpt":{"rendered":"
Tax credits and deductions change the amount of a person\u2019s tax bill or refund. People should understand which credits and deductions they can claim and the records they need to show their eligibility. Tax credits A tax credit reduces the income tax bill dollar-for-dollar that a taxpayer owes based on their tax return. Some tax […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[7,6,5],"tags":[64,267,135,266,8],"class_list":["post-7218","post","type-post","status-publish","format-standard","hentry","category-irs","category-sex-workers","category-taxes","tag-credits","tag-keep-records","tag-standard-deduction","tag-tax-credits-and-deductions-for-individuals","tag-taxes"],"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/posts\/7218","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/comments?post=7218"}],"version-history":[{"count":1,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/posts\/7218\/revisions"}],"predecessor-version":[{"id":7219,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/posts\/7218\/revisions\/7219"}],"wp:attachment":[{"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/media?parent=7218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/categories?post=7218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sexworkertaxes.com\/index.php\/wp-json\/wp\/v2\/tags?post=7218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}