Five Most Important Federal State IRS Tax Credits in 2008 2009

Tax is one heck of a complex subject and for a individual, knowing everything about taxes is virtually impossible. Thanks to Tax Agents and Tax Preparation Services which make our life lot easier. However, as a tax payer you MUST know a way to save your hard earned money by claiming tax credits. Tax Credits keep on changing each year or there are new tax credits coming up based on the demand such as Tax Stimulus credit in 2009. You might be eligible for a tax credit. A tax credit is a dollar-for-dollar reduction of taxes owed. Some Tax credits are even refundable, means you might receive a refund rather than pay any taxes.1) Earned Income Tax Credit: Earned income tax credit is a refundable credit for low-income working individuals and families. The amount of credit depends on the Income and family size of the tax payer. 2) Child and Dependent Care Credit is for expenses paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent, to enable you to work or look for work. 3) The Child Tax Credit is for people who have a qualifying child. The maximum amount of the credit is $1,000 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses. 4) The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is designed to help low- and moderate-income workers save for retirement. You may qualify if your income is below a certain limit and you contribute to an IRA or workplace retirement plan, such as a 401(k) plan. The Saver’s Credit is available in addition to any other tax savings that apply.5)  Health Coverage Tax Credit Certain individuals, who are receiving certain Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit when you file your 2008 tax return.