A professional tax preparer often finds more eligible itemized deductions. Tax credits are more valuable than tax deductions because credits directly reduce the taxes you owe, whereas deductions reduce your taxable income. The earned income tax credit is for low-income working taxpayers. If you have children, there's a tax credit for each child. And there's a tax credit if you pay for child care.
Most people rejoice if they receive a tax refund.
But recipients of tax refunds shouldn't really be happy, because a tax refund means you've given the government an interest-free loan. Now you're empowered with some basic income tax knowledge. 30 Dr. Mike Walden is a professor and Extension economist in the Department of Agricultural and Resource Economics of North Carolina State University's College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. His You Decide column is provided every two weeks by the Department of Communication Services.