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Tax Credit Consulting Salem OR

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.

Mayer Financial Group
(503) 585-1393
2367 State St Ste 30
Salem, OR

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Northwest Tax & Bookkeeping
(503) 585-6948
750 Hawthorne Ave NE
Salem, OR

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Cornerstone Tax & Financial
(503) 363-3786
1084 Liberty St SE
Salem, OR

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Jackson Hewitt
(866) 634-1040
3832 River Rd North
Keizer, OR

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Max Refund Tax Svc
(503) 393-2141
4947 River Rd N
Keizer, OR

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H&R Block
(503) 363-1585
1361 LANCASTER drNE
SALEM, OR

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Jackson Hewitt
(503) 585-4663
3771 Commercial St. SE
Salem, OR

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H&R Block
(503) 585-5264
1361 LANCASTER DR
SALEM, OR

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Evans Accounting & Tax Inc
(503) 588-3673
146 Chemawa Rd N
Keizer, OR

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H&R Block
(503) 390-6622
2927 NE BROADWAY ST STE 150
SALEM, OR

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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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Local Opinions
Tax Payers in Oregon shared their opinions about IRS Survey
Have you had experience dealing with the IRS and their customer service reps?
Yes: 75%
How would you rate your experience?
Absolute disaster: 7%
Somewhat negative: 23%
Uneventful: 53%
Somewhat pleasant: 7%
Pleasant: 7%
What was the subject of your most recent communication with the IRS?
Making/scheduling payment: 26%
Disputing taxes owed: 23%
Investigating information: 3%
Dealing with lien/levy: 0%
Responding to a letter/demand: 11%
Other: 34%
Source: Survey.com