What You Should Know About This Year’s Tax Credits

Some cash next to a christmas gift box.

Want to end the year with a financial bang? Look no further than government tax credits. They are a way regular folks can reduce or even eliminate taxes they would otherwise owe in April. And since the figures change year to year, it’s good to know what specifically you can declare for tax year 2023.

As the year comes to an end, take a look at five tax credits that are helping millions of tax filers in the U.S. keep more cash in their pockets:

1. College Students: American Opportunity Tax Credit (AOTC)

Need help sending yourself or a loved one to college? The federal government designed the American opportunity tax credit (AOTC) for “qualified education expenses paid for an eligible student for the first four years of higher education. You can get a maximum annual credit of $2,500 per eligible student.”

Check out their website to find out if you may be eligible.

2. Families with Children

Raising a child is expensive. That’s why the government has something to help parents keep more of their hard-earned dollars in their pockets. According to U.S. News & World Report, this tax credit helps “income-eligible families with children ages 16 and under. The credit is worth $2,000, of which $1,400 may be refundable to qualifying parents.”

3. Earned Income Tax Credit (EITC)

Some lower-income families who need assistance will be holding on to more of their cash – from $600 to over $7,000, thanks to the Earned Income Tax Credit (EITC). Whether you qualify depends on your wages, dependent situation, and other factors.

4. Child and Dependent Care Tax Credit

The cost of child care and other types of care for dependents with disabilities can take a toll on the finances of struggling families. Find out if the child and dependent care tax credit applies to your situation. It is yet another tax break that may let you “claim from 20% to 35% of your care expenses up to a maximum of $3,000 for one person, or $6,000 for two or more people,” Turbo Tax reports.

5. Energy Efficient Home Improvements Credit

Have you taken steps to create a more energy efficient home? Some of those expenses may help lower your taxes, as well. The IRS says that “the credit equals 30% of certain qualified expenses,” including:

  • Qualified energy efficiency improvements
  • Residential energy property expenses
  • Home energy audits

This one covers a lot of territory. If you have made certain improvements involving heat pumps or stoves, sealed your building’s exterior, or made other changes, you may qualify for this tax credit.

File Your Taxes in January

As a holiday gift to yourself, start getting your financial documents in order so you can keep as much of your own money as possible in the new year – and get your refund as soon as possible! The sooner taxes are filed, the quicker a refund can be issued. State and federal tax filing seasons both begin in January.

There may be other types of tax relief available to you – for example, if you’re retired or run a small business. Our country’s tax system is complex. To be on the safe side, consider working with a professional to make sure you’re taking advantage of tax credits that apply, and that you declare them properly in your filing.

Use Direct Deposit at Currency Exchanges Like CFSC to Get Tax Refunds Faster

Wouldn’t it be great to have some extra cash to spend in the new year? Why do the work when you can get the government to do it for you? If you expect to receive a tax refund, there are two ways to get those funds even faster. When filing your taxes:

  1. Either have the check sent by mail to the nearest Community Financial Service Center (CFSC) to receive it up to four days sooner than by mail.
  2. Or, use Direct Deposit and have it loaded to your Yes! Debit card so it comes up to five days sooner than by check.

Check out CFSC currency exchanges to discover the many other financial and auto-related services available to you. Visit your closest CFSC location to find out more!

Recent Posts


Blog Archives