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Tax Credit Consulting West Memphis AR

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.

Liberty Tax Service
(866) 871-1040
429 W Broadway St
West Memphis, AR

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Mo Money Tax Svc
(901) 527-1775
311 Exchange Ave
Memphis, TN

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H&R Block
(901) 544-1908
631 CHELSEA Ave
MEMPHIS, TN

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3T Solutions
(901) 774-6351
902 Polk Ave.
Memphis, TN
 
On The Spot Tax Refund Service
(901) 458-1064
3199 Jackson Ave
Memphis, TN

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Jackson Hewitt
(870) 739-1001
2 North Flowers Trail
Marion, AR

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VIP Tax Solutions
(901) 620-6577
525 North Main Street Suite3-4
Memphis, TN
 
H&R Block
(901) 274-6640
634 S BELLEVUE blvdSTE 101
MEMPHIS, TN

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Mo' Money Taxes
(901) 725-9275
403 N Cleveland St
Memphis, TN

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J R's Tax Service
(901) 458-4314
3279 Summer Ave
Memphis, TN

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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 Arkansas shared their opinions about IRS Survey
Have you had experience dealing with the IRS and their customer service reps?
Yes: 71%
How would you rate your experience?
Absolute disaster: 28%
Somewhat negative: 7%
Uneventful: 35%
Somewhat pleasant: 14%
Pleasant: 14%
What was the subject of your most recent communication with the IRS?
Making/scheduling payment: 35%
Disputing taxes owed: 14%
Investigating information: 14%
Dealing with lien/levy: 0%
Responding to a letter/demand: 28%
Other: 7%
Source: Survey.com