Clients may be eligible to claim certain tax credits and deductions when filing their tax returns, which can reduce their overall tax liability or, in some cases, result in a refund. This may include credits and deductions related to qualified dependents or other tax provisions under federal or state law.
A tax credit is an amount that reduces the tax owed and may, depending on the type of credit, lower the tax payment or increase the refund. Certain credits are refundable, meaning they may generate a refund even if the client has no tax liability.
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As a taxpayer, you may be eligible to claim a variety of tax credits and deductions that can reduce your overall tax liability or, in certain cases, result in a refund. Common examples include:
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Income-Based Credits: Available to individuals earning below certain income thresholds
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Dependent or Caregiver Credits: For parents or individuals caring for qualifying dependents
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Education Credits: For tuition or other qualified higher education expenses
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Retirement Contributions: Credits or deductions for contributions to qualified retirement savings accounts
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Energy and Environmental Credits: For investments in clean vehicles, renewable energy, or energy-efficient home improvements
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Health Insurance Premium Tax Credits: For coverage purchased through the Health Insurance Marketplace
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Other Personal Tax Credits: Applicable based on your unique circumstances, including credits for disability, adoption, or other eligible personal expenses
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Important Notice: Eligibility for credits and deductions is determined by federal and state tax laws. AGI Tax Experts prepares returns based on the information provided by the client and cannot guarantee eligibility, refund amounts, or tax savings. Clients are responsible for providing complete and accurate information to claim any credits or deductions.
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Take deductions
A deduction is an amount you subtract from your income when you file so you don’t pay tax on it. By lowering your income, deductions lower your tax.
You need documents to show expenses or losses you want to deduct. Your tax software will calculate deductions for you and enter them in the right forms. If you file a paper return, your deductions go on Form 1040 and may require extra forms.
Standard vs. itemized deductions
Most people take the standard deduction, which lets you subtract a set amount from your income based on your filing status.
If your deductible expenses and losses are more than the standard deduction, you can save money by deducting them one-by-one from your income (itemizing). Tax software can walk you through your expenses and losses to show the option that gives you the lowest tax.
Some people, including nonresidents and partial-year filers, can’t take the standard deduction. ​
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Standard Deduction by Filing Status
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$15,750 — Single taxpayers and married individuals filing separately
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$31,500 — Married couples filing jointly and qualifying surviving spouses
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$23,625 — Heads of household
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You can deduct these expenses whether you take the standard deduction or itemize:
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Alimony payments
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Business use of your car
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Business use of your home
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Money you put in an IRA
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Money you put in health savings accounts
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Penalties on early withdrawals from savings
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Student loan interest
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Teacher expenses
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For some military, government, self-employed and people with disabilities: work-related education expenses
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For military servicemembers: moving expenses
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If you itemize, you can deduct these expenses:
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Bad debts
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Canceled debt on home
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Capital losses
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Donations to charity
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Gains from sale of your home
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Gambling losses
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Home mortgage interest
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Income, sales, real estate and personal property taxes
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Losses from disasters and theft
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Medical and dental expenses over 7.5% of your adjusted gross income
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Miscellaneous itemized deductions
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Opportunity zone investment
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