Income Tax Relief For The Middle-Class

In a troubled economy, income tax relief can help many middle-class wage earners stretch their paychecks to help to pay for the cost of fuel and food. During recent years, there have been several acts passed by Congress that have been designed to help alleviate some of the financial burden of the working middle class and help them keep some of their hard earned income.

Common Forms of Tax Relief

The most common form of tax relief for middle income families and workers are tax credits. Tax credits are much more valuable than tax deductions. Whereas tax deductions only decrease the taxable income of wage earners, tax credits are actually reductions in the actual tax owed to the Internal Revenue Service. Currently there are many different tax credits available to middle income wage earners; for example, some of the most common tax credits that middle income taxpayers are eligible for are: 

• Education tax credits
• Child Adoption tax credits
• Energy-saving tax credits
• Retirement savings tax credits

The Earned Income Credit

In addition, one of the most beneficial tax credits available to middle income taxpayers is the earned income credit, which is made available to middle and lower income families that have children and pay expenses related to the care of the children. In addition, there are many other specialty type tax credits that may be applied to federal income tax returns by middle income wage earners.

Itemize Deductions and Save Even More

When filing your federal income tax return, consider itemizing your deductions. Studies have shown that most middle income families can save money on income taxes owed, and even possibly increase refunds, by organizing and accurately keeping track of receipts, invoices and other payment documents.

If you have significant expenses related to your job, health care costs, or even sending your children to school, you should make sure that you keep all payment documents for these types of expenses. If they are over a certain threshold, you may be entitled to larger deductions than if you don’t itemized deductions and expenses.

Contact a qualified tax accountant or visit the Internal Revenue Service website for more information on these other types of tax deductions and tax relief. The Internal Revenue Service’s website has many different publications and guides that are easy to understand and explain the different types of tax relief measures as well as how to qualify for and claim tax deductions and tax credits. Before filing your income tax return, make sure that you research all available tax credit and deduction options that may be available to you.