Home | Save Homepage | Budget | Investment | Loan & Planning | Taxes | Insurance | Daily life financial tips |

Claimimg Tax Credits

The first step in calculating you income tax is putting a figure on your liability. This liability is then reduced by claiming tax credits.
Non refundable credits: In this case, if your credits exceed your liability you do not get a refund.
Refundable Credits: In this case, if your credits exceed your liability you get a refund.

Let us look at the various tax credits:
1. Child Tax Credit for Children under 17
This is determined by using an official worksheet.
2. Child and Dependant Care Credit
This credit can be availed if you need to spend money to hire someone to take care of your children or dependants.
3. Adoption Tax Credit
This is given to you in case you adapt children under 18. You can also avail this credit if your dependant is physically or mentally challenged.
4. Excise Tax Credit on Telephone
You can obtain a credit on the excise tax you pay the telephone company.
5. Residential Energy Tax Credit
If you save energy by making improvements in your house you can avail tax credits.
6. Hybrid Vehicles Tax Credit
This is available on vehicles that contribute to fuel economy.

Other tax credits on offer are for education, retirement savings, care of the elderly, care of the disabled, mortgage interest, buying a house and health coverage.

With so many credits on offer you should not miss out claiming any of these to reduce your tax payments. It is the responsibility of the government to offer these benefits and keep taxes low.

Taxes

MPF Main Categories