Day 5: Count your credits
If you thought deductions were good, you're in for a real treat today.
Pull out the tax return you chose yesterday. If it's a Form 1040 or Form 1040A, look on the back and you'll find an assortment of credits sprinkled in all those lines. These tax credits, along with your withholding, are how you pay your eventual IRS bill.
That means tax credits cut your tax bill dollar for dollar. A few even can get you a refund.
If you didn't make much money, you may be eligible for the earned income tax credit, or EITC. This is the one credit that's also available on the 1040EZ.
On the other two forms, many more credits show up. Among the most popular are the child-related tax breaks, from the $1,000 per child tax credit to the one you can claim if you paid for day care to watch them while you worked. There's even a credit to cover some adoption expenses.
Credits also are available for some education costs, yours as well as your children's. Even older filers have their own special tax credit.
So check out the credit possibilities, and get ready to claim them. You'll get your chance tomorrow.