Lower your tax bill

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Preparing your tax returns can be stressful.

Things change every year, and the language is often confusing. The IRS estimates that 1 in 5 people who qualify for the Earned Income Tax Credit don’t claim it on their tax return.* We are here to help make sure you aren’t one of them.

Ways to potentially lower your tax bill:

Watch the 5 Ways To Potentially Lower Your Tax Bill video
Look at your tax return to see which credits you did and didn’t get last year
Call 1-800-791-2363 or schedule time with a Coach to understand what resources are available to find tax credits

Watch this video on 5 common tax credits, then review the sections below to see which you might qualify for. After that, you can give our coaches a call.

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5 Ways To Potentially Lower Your Tax Bill

Click on the tax breaks below to see where you qualify.

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Earned income tax credit (up to $7,830)

This is a refundable tax credit, meaning you could receive money back if you qualify and don’t owe other taxes. The amount varies based on your income and is for people with income under $63,398 and investment income below $11,000 (2024 limits). Use the Earned Income Tax Credit Assistant (takes 5 minutes) on the IRS website to see if you qualify. Having lasts year’s tax return or W-2 from your employer will help you answer the questions.

Child tax credit or Credit for Other Dependents (up to $2,000 per child)

This refundable tax credit applies to most people who have kids or other dependents. If you earn less than $200,000 (single filer) or $400,000 (married filing jointly) and have a child or dependent who lived with you for at least 6 months, you likely qualify for up to $2,000 per child. Use the IRS Child Tax Credit Assistant (5 minutes) to see if you qualify.

Child or Dependent Care Credit (up to $6,000)

If you paid expenses for someone to care for a child/dependent in order for you (and your spouse, if filing a joint return) to work or actively look for work, then you may qualify for this credit. A qualifying dependent is under the age of 13, or someone of any age who is incapable of self-care and who lived with you for more than half of the year. You can receive a percentage of your care expenses back. Find out if you qualify (5 minutes).

Education credits (up to $2,500)

There are two education credits to help with the cost of higher education by reducing the amount of tax owed. The American Opportunity Tax Credit (AOTC) primarily helps with undergraduate degrees while the Lifetime Learning Credit (LLC) can also help with additional classes and accredited job skills training. View this quick table to see if either of these apply to you. (5 minutes).

Savers tax credit (up to $1,000 for single)

Contributions to retirement plans already come with many tax advantages, so this is just one more reason to save. Depending on your adjusted gross income, you could get a 50%, 20% or 10% credit of the contribution amount you made to a qualified retirement plan. This credit lowers your taxes if you contribute to plans such as a:

Traditional or Roth IRA
401(k), 403(b), governmental 457(b)
See IRS website for a full list of account types

View a quick chart to see if you qualify (and for how much!) based on your income and how much you saved (3 minutes).

Here are 3 more handy tips to help you with your taxes.

Get (free) help filing your tax return

If your adjusted gross income is $79,000 or less, you could file a free electronic federal return with an IRS Free File partner. They offer software that guides you through the filing process. If you need more help and make less than $64,000, you could try the IRS's Volunteer Income Tax Assistance program. More than 20 states also offer a version of Free File where your state return can also be done for no charge.

Know when you can claim a dependent

There lots of situations where it can be confusing if you can claim someone as a dependent. Here’s a page on the IRS website that lists who qualifies as a dependent. The site also lists a bunch of deductions and credits related to having dependent children or adults—so it’s worth checking out.

Optimize the taxes coming out of your paycheck

When you start a new job, you complete a Form W-4 so your employer can withhold the correct federal income taxes from your paycheck. Things often change in life—like your number of dependents, spouse’s job status or other sources of income—and we can forget to update these forms. As a result, your employer could be withholding too much or too little taxes.

Some people like to get money back from their tax return—to get a little extra money once a year. This is fine but keep in mind that the IRS doesn’t pay you interest on the money while they’re holding it.

Other people want as much money each pay period and are all right with potentially owing money at tax time.

The choice is yours. To help you make it, check out the IRS Withholding Estimator. (5 minutes). It’s best to have a recent pay stub and tax return handy. Their W-4 FAQs page can also help you decide if you need to make a change.

CALL A COACH

Let’s learn what resources are available to you!

You can either schedule time with a Financial Wellness Coach, or just call 1-800-791-2363.

Schedule a call

Get the most from your session by bringing last year’s Form 1040 (not required).

RESOURCES

TurboTax makes it easier and more affordable for you to prepare and file your tax returns–at a special discount. Get access to the free edition for simple returns.

Learn more

*https://www.irs.gov/newsroom/on-eitc-awareness-day-irs-and-partners-promote-major-tax-benefit-to-millions-of-low-and-moderate-income-workers#:~:text=A%20tax%20credit%20usually%20reduces,taxpayers%20do%20not%20claim%20it

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