What is a Tax Break?
How Does a Tax Break Work?
For example, let's say John and his wife had a baby in 2011. When John files his tax return for the year 2011, he will qualify for a $1,000 child tax credit, which lowers his tax bill by $1,000. In other words, John and his wife get a tax break for having a baby.
There are hundreds of different kinds of tax breaks available to individuals and companies, though these tax breaks are usually only available under certain circumstances. Many tax breaks are not available to taxpayers with high incomes.
Why Does a Tax Break Matter?
Tax breaks lower tax bills, which is why taxpayers and tax advisors spend considerable amounts of time determining which deductions and credits they qualify for each year. Governments often implement tax breaks as a way to encourage certain behavior or investment in certain industries or programs.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
According to financial industry studies, more than three-quarters of portfolio performance and volatility is related to ...Read More →
Even people with jobs are depressed about the nation's unemployment statistics. The outlook is...Read More →
When you're faced with serious money sucks -- say, unemployment, a new home or the prospect of funding your child's college education -- it...Read More →
The average tuition for a four-year US public college will cost you a steep $10,000 per year according to The College Board, while...Read More →