It is tax return season, as reported by the US Internal Revenue Service (IRS). In fact, the campaign will last until April 15th, when all taxpayers in the country must have filed their returns based on the income they have generated during the fiscal year. For this regulation, there are two main categories of tax options that can change what each citizen owes: tax credits and tax deductions.
Tax credits, on the other hand, are usually a direct subtraction of what each citizen who has filed a tax return owes and that, sometimes, that amount can be refunded back into the taxpayer’s account. A tax deduction, however, reduces the total amount of income that is subject to state taxes. With this in mind, for the year 2025, there is a list of the ten most important tax credits and deductions in the United States that all citizens who are going to file their tax returns with the IRS should be aware of.
Tax credits and deductions in 2025
- Child tax credit
The child tax credit is the main tax break for families with children under the age of 18. For the 2024 tax year, the child tax credit is worth up to $2,000 per child. What makes this credit the most valuable is that even if you don’t owe any tax, you can get up to $1,700 back.
- Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is designed for low-income taxpayers who receive paychecks for employment. Taxpayers with and without children are eligible, but those with children may qualify for the highest credit range, which varies from $632 to $7,830.
- Credit for the care of children and dependents
For parents and families with children under 13 or legally dependent adults. This credit can be up to 35% of $3,000 of expenses for the first dependent. However, the maximum credit is $6,000 for two or more dependents.
- Opportunity tax credit
The tax credit for opportunity gives taxpayers a sum for the first $2,000 spent on tuition, books, fees and equipment for universities and technical schools. However, dormitories, apartments or other housing or transportation expenses are not allowed under this credit, although up to $1,000 of the credit is refundable, depending on the taxes owed.
- Credit for lifelong learning
The lifelong learning credit is focused on universities and technical schools and allows a credit of up to 20% for up to $10,000 paid in tuition, books and fees. The maximum value of the credit is $2,000 and does not include housing, accommodation or transportation expenses.
- Student Loan Interest Deduction
The deduction can offset up to $2,500 of your taxable income based on the interest paid the previous year on those student loans.
- Adoption credit
Parents of adopted children can get a tax exemption to help cover some of the qualified costs of the adoption process. This credit decreases as the taxpayer’s income increases, with a maximum value of $16,810.
- Charitable donations deduction
This deduction is only available to taxpayers who itemize their deductions on their tax returns. If so, such charitable donations can generally receive a deduction of up to 50% of their adjusted gross income.
- Medical expense deduction
This deduction must be part of an itemized tax return. In general, taxpayers can deduct medical and dental expenses they paid for themselves, their spouse or their dependents during the tax year if they exceed 7.5% of their adjusted gross income for the year.
- SALT deductions
Taxpayers, generally homeowners, can deduct up to $10,000 ($5,000 if they are single or married filing separately) for the amount they paid in state and local property taxes and income or sales taxes.
