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Tax Credit Consulting Barre VT

Since you pay taxes like a good citizen, you already know the power of the tax deduction. With this introduction to tax credits, you are about to learn of a more powerful tax saving tool.

H&R Block
(802) 479-9100
TWIN CENTER PLAZA SHOPPING CENTER 1284 RTE 302
BERLIN, VT

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Misasi & Misasi PC
(802) 388-6307
11 Ct St
Middlebury, VT

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Independent Tax Service Inc
(802) 863-2271
Chace Ml
Burlington, VT
 
Kupiec Al & Associates
(802) 879-1509
58 Pearl St
Essex Junction, VT
 
Harton & Associates Robert & Jeff
(802) 878-4458
57 River Rd
Essex Junction, VT
 
Lachance Susan CPA PC
(802) 878-7677
45 Logwood Cir
Essex Junction, VT
 
Jacob Philip H Tax And Business Services
(802) 862-8889
12 Perrotta Pl
Burlington, VT
 
H&R Block Inside St Albans Commons
(802) 524-3140
178 SWANTON RD
SAINT ALBANS, VT

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H&R Block
(802) 863-9999
155 DORSET ST
SOUTH BURLINGTON, VT

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H&R Block
(802) 442-3100
222 NORTH ST
BENNINGTON, VT

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Tax Credit Consulting

Introduction to Tax Credits

Since you pay taxes like a good citizen, you already know the power of the tax deduction. With this introduction to tax credits, you are about to learn of a more powerful tax saving tool.

Assume you are at a cocktail party and the issue of taxes comes up. What is the first thing people complain about besides paying them? The number one complaint is the government is getting rid of all the tax deductions. This bitterness makes sense because tax deductions are the primary tool taxpayers have for knocking down their gross income when figuring out there taxes. The problem with this argument, however, is most people don't take into account the value of tax credits.

With any introduction to tax credits, it is important to understand a few things. First, a tax credit and tax deduction are two different things. Second, a tax credit is FAR more valuable than a tax deduction in most cases. Third, most people fail to claim tax credits that are available to them and overpay their taxes. Okay, let's get to the nitty gritty.

Tax credits are different and far more valuable than tax deductions. A tax deduction is used to lower your gross income with the result being called your adjusted gross income. In simple terms, you total all of your earnings and reduce that amount by your total tax deductions. You then take the remaining figure and find out how much you owe by applying it to the tax table provided by the IRS. A tax credit works a little differently.

With tax credits, you follow the same approach as above. Figure out your gross earnings. Subtract all deductions. Figure out the tax owed by taking the remaining figure and applying it to the relevant tax table. Here is where it gets really good. Once you have the exact amount of tax you owe the IRS, you reduce that amount by any tax credits you are going to claim. If you owe $10,000 and claim tax credits for $4,000, you end up writing a check for $6,000. Let's look at a practical example...

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