Take Charge of Your Income Taxes

Be prepared for your taxes with our guide to understanding tax forms, the lingo, tax credits and our tips for finding deductions that can save you money.

Save Money with Tax Credits

Use these tax credits―some of them brand-new―to lower your tax bill even more!

Take tax credit where credit is due

First-time home-buyer credit: If you bought a home last year or will do so before April 30 this year, get a credit of up to $8,000. Not your first home? As long as you were in your prior home for five years, you can claim this credit.

Child credit: Claim $1,000 per child younger than 17.

Dependent-care credit: Claim up to 35 percent of child-care costs, as well as dependent-care expenses for a person unable to look after him or herself. The limit is $3,000 for one, $6,000 for two or more.

Making Work Pay credit: If taxes are withheld from your pay, your $400 credit was spread out in your 2009 checks. If your taxes aren’t withheld, claim it.

Postsecondary educational credits: With the new American Opportunity credit, get $2,500 per student for four years. Or receive $2,000 per student per year for two years with the Lifetime Learning credit. Take just one of these credits each year.

Energy-efficiency improvement credits: Receive 30 percent of the cost, up to $1,500, back on new energy-efficient doors, windows, insulation, roofs and other products. See energystar.gov/taxcredits.

Earned Income tax credit: Low- and middle-income workers might qualify. To find out if you’re eligible and to get assistance from the IRS (the rules are complicated), go to irs.gov/eitc, and click on “EITC Assistant.”