What are Tax Credits? CPA Explains How Tax Credits Work (With Examples)

What are tax credits? And how they are different from tax deductions? This episode is the answer.

I’ve personally used tax credits to save over $100,000 in taxes over the years and I want to make sure you understand this simple, but very important concept.

In this episode, I am going to cover what a tax credit is, some of the different types of tax credits available, and more importantly, how you can claim them.

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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).

[jonathanserrata]

YouTube is really better than School. I've spent half my life in School and never once have they spoke about Tax benefits, as well as other stuff like Law, Nursing or Computer Science. I follow YouTubers for each of those categories because the information on those channels are invaluable.

[r.e.]

As always, thank you for your contributions.

[hkhxhnx]

You just got a new subscriber. Thanks for explaining things clearly.

[karlomagnoguadalupe]

very good explanation, thank you for answering my question today :/

[GrowingWithM]

Thanks for explaining... so I understand the concept of both a tax credit and a reduction... my question is can both be used and if so whats the order in which they are actioned. Say for example your employer pays your taxes and fall short by 1k so taxed owed is 1k... and you have both qualifying deductions and credits of 10k each does the govt first remove the deductions with might now put you in the positive ( to get a refund) rendering you unable to use the credits again since you technically dont owe taxes that the credit can be deducted from or is the credit first used to cancel out the 1k and then further the deductions.. thank you

[ebayseller]

do I get the earned income tax credit or that is only to pay for health insurance bought from marketplace?

[markmyjak]

How about discussing foreign tax credits. I have investments where i pay taxes to Israel and Canada.

[chelciebrown]

I’ve had a mistake on a answer on my wotc tax credit questionnaire how can I fix it I also didn’t put my apartment number

[r.e.]

Great day, LYFE Accounting family! No dad joke today? Lol

[PRINCEOOCHIEPRODUCTIONS]

Make another video with updated credits for 2024

[bictoriouslifts]

What if your tax credit is higher than what is due?

[ITB]

What if you have taxes credits and zero loss or zero income how do one receive a refund ?

[Native]

What if you don't owe any taxes, and receive a $8000 federal tax credit? Would I receive a refund of $8000? I'm confused.

[MarlonBrando]

If an investor gives 200k towards a film for example and gets a tax credit of 30%, what does that mean?

[mexicanfluency]

What if it’s a 7500 credit but you only owe 3500 for a given year? What happens to the remaining non-refundable credit, does it carry over to the next year?? :-)

[derrickbosler]

I only made 2800 last year but i had 1832 in credits i was like what