Seven Tax Credits for Low-Income Taxpayers

  • Post category:Taxes

When people discover that there are ways to reduce taxes, they often assume that those ways are geared only toward high-income taxpayers. But there are tax credits available to low-income taxpayers that can help reduce their tax burden and make a positive difference in their financial lives. Let’s take a look at seven of them. First, let’s clarify the difference between a tax credit and a tax deduction. Tax credits are a dollar-for-dollar reduction of your tax bill while a deduction just reduces your taxable income. For example, a $1000 tax credit will actually reduce your tax bill by $1,000 (i.e., a $5000 tax bill would be reduced to $4000). A $1000 deduction, on the other hand, would reduce your taxable income (i.e., from $50,000 to $49,000) resulting in an actual tax savings of approximately $100-$300, depending on your tax bracket.

The Savers Credit
It’s difficult to save for retirement when your income is low, but if you do you can qualify for this special tax credit that gives an additional tax break on the first $2,000 contributed to a retirement account such as a 401(k), IRA, 403(b), etc.

American Opportunity Credit
Formerly known as the Hope Credit, this offers a credit for money spent on certain college expenses.

Earned Income Tax Credit
Individuals who meet the income requirements can qualify for this credit, which reduces their overall tax liability and can result in a refund. In some cases, taxpayers can qualify for a refund that exceeds the amount they paid in taxes.

Lifetime Learning Credit
Allows up to $2,000 in tax credits for certain education expenses. Cannot be used in conjunction with the American Opportunity Credit.

Child and Dependent Care Credit
This credit is for the cost of paying someone to care for your child or dependent. When you qualify, you can get a credit equal to as much as 35 percent of your qualifying child or dependent care expenses, as long as the provider meets qualifications. Note that the care must be given to a child under 13 or to a dependent who is physically or mentally incapable of caring for him or herself.

Credit for the Elderly or the Disabled
Qualified individuals who are 65 or older or who have a permanent disability may qualify for this special tax credit.

Child Tax Credit
Taxpayers with qualifying dependent children may qualify for up to $1,000 in tax credits per child. This credit can be taken along with the child and dependent care credit.

We recommend you consult with your tax advisor to see if you qualify for any of these credits.

Although this information has been gathered from sources believed to be reliable, it cannot be guaranteed and the accuracy of the information should be independently verified. This material is intended for informational purposes only and should not be construed or acted upon as individualized investment advice. Neither Kramer Wealth Managers, nor Osaic Wealth, offer tax or legal advice. Federal tax laws are complex and subject to change.

Adrianna Rocha

Client Relations Specialist

240-379-6929 V
240-439-6889 VP
512-379-6909 FAX
info@kramerwealth.com

Since joining Kramer Wealth Managers in 2021, Adrianna Rocha has been a client service dynamo, ensuring every client interaction is seamless and delightful. She’s the go-to guru for all things client experience, handling everything from videophone chats to scheduling meetings and processing forms with a smile. Her goal? To make sure every client feels valued and well-cared-for.

Adrianna graduated with a Bachelor of Arts in Communication Studies from Gallaudet University in 2017 and brings nearly a decade of customer service experience to our team. She thrives on personal connections, celebrating both her achievements and those of our clients. When she’s not busy at work, you might find her indulging in her passions—dogs, houseplants, essential oils, and the tantalizing flavors of Mexican cuisine. Proud fur-mama to her adorable Aussie mix, Ziva. Adrianna brings a touch of warmth and enthusiasm to everything she does.

Q: What’s your favorite part of working with clients?

A:  I enjoy client service because it allows me to help people and make a positive impact. Using my listening skills to understand client needs and solve problems is satisfying. I love turning negative experiences positive and the daily variety of challenges.

Adrianna is not registered with Osaic Wealth.

Adrianna Rocha

Client Relations Specialist

240-379-6929 V
240-439-6889 VP
512-379-6909 FAX
info@kramerwealth.com

Adrianna Rocha joined Kramer Wealth Managers in 2021.

Adrianna is responsible for client experiences and service. As part of the customer service team, she strives to help and provide top-notch service to our clients. As part of her role, she communicates with clients through videophone, schedules client meetings, prepares and processes forms, and gathers information for our advisors.

Adrianna Rocha graduated with a Bachelor of Arts in Communication Studies from Gallaudet University in 2017. Before she joined our team, she worked in the customer service industry for nearly a decade. She excels in human-to-human relations and takes pride in not only her own accomplishments, but her clients’ as well. Adrianna enjoys chatting about her slight obsession with dogs, houseplants, essential oils, and food: especially Mexican food! She is also a proud fur-mama to her beautiful Aussie-mixed pup, Ziva.

Adrianna is not registered with Osaic Wealth.

Jack Morley

Client Relations Specialist

240-379-6929 V
240-439-6889 VP
240-379-6909 FAX
info@kramerwealth.com

Jack Morley has been a vital part of the Kramer Wealth Managers team since 2010, starting with various projects and officially joining full-time in 2013. As our go-to Account Service Specialist, Jack is the friendly face and reliable voice who ensures a smooth client experience. He’s the linchpin in client communications, handling account maintenance and bridging connections between clients and our advisory team.

A 1998 graduate of Gallaudet University with a BA in Psychology, Jack brings a wealth of customer service experience from retail and human services. His handyman skills are a bonus, making him the resident problem-solver and DIY enthusiast. Outside the office, Jack enjoys long walks with his dog Bailey.

Married for 25 years to his wonderful wife, Monica, Jack is also the devoted dad to two dynamic daughters who keep him on his toes. When he’s not walking Bailey—he’s likely tinkering on a new project or spending quality time with his family.

Q: What’s your favorite part of working with clients?

A:  I enjoy assisting clients in maintaining their accounts and ensuring there is a smooth transition in between changes being made within their accounts.

Jack is not registered with Osaic Wealth.