Tax Credit Consulting Brigham City UT
Salt Lake City, UT
Exit Strategy Specialists, LLC
Years of Experience: 26
IARFC, MDRT, FPA
Invoice, Estate Planning, Business Planning, Portfolio Management, Trustee Service, Pension Planning, Executive Compensation Planning, personal Coach, Retirement Planning, Tax Planning, Seminars Work, Employee Benefits, Stocks and Bonds, Mutual Funds, Mortgage Loans, Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Medical Insurance, Group Insurance, Business Coach, Charitable Planning, Education Plan, Asset Protection, BuySell, Compensation Plans
Cedar Hills, UT
Salt Lake City, UT
Education: BSc (Math)MBA
Years of Experience: 16
IARFC, MDRT, NAIFA
Invoice, Estate Planning, Business Planning, Portfolio Management, Pension Planning, Executive Compensation Planning, Retirement Planning, Medicaid Planning, Tax Planning, Seminars Work, Employee Benefits, Stocks and Bonds, Mutual Funds, CD Banking, Annuities, Life Insurance, Long Term Care Insurance, Group Insurance, Charitable Planning, Education Plan, Charitable Foundations, Asset Protection, BuySell, Compensation Plans
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...