Tax credits are some of the most valuable tools around to help cut your tax bill. But figuring out how to use these credits on your tax return can get complicated very quickly. Here’s what you need to know.
Understanding the difference
To help illustrate the difference between a credit and a deduction, here is an example of a single taxpayer making $50,000 in 2025.
Tax Deduction Example: Gee I. Johe earns $50,000 and owes $5,000 in taxes. If you add a $1,000 tax deduction, he’ll decrease his $50,000 income to $49,000, and owe about $4,800 in taxes.
Result: A $1,000 tax deduction decreases Gee’s tax bill by $200, from $5,000 to $4,800.
Tax Credit Example: Now let’s assume Gee has a $1,000 tax credit versus a deduction. Gee’s tax bill decreases from $5,000 to $4,000, while his $50,000 income stays the same.
Result: A $1,000 tax credit decreases your tax bill from $5,000 to $4,000.
In this example, your tax credit is five times as valuable as a tax deduction.
Credits are usually worth more
Credits are generally worth much more than deductions. However there are several hurdles you have to clear before being able to take advantage of a credit.
To illustrate, consider the popular child tax credit.
Hurdle #1: Meet basic qualifications
You can claim a $2,200 tax credit for each qualifying child you have on your 2025 tax return. The good news is that the IRS’s definition of a qualifying child is fairly broad, but there are enough nuances to the definition that Hurdle #1 could get complicated. And then to make matters more complicated…
Hurdle #2: Meet income qualifications
If you make too much money, you can’t claim the credit. If you’re single, head of household or married filing separately, the child tax credit completely goes away if you exceed $240,000 of taxable income. If you’re married filing jointly, the credit disappears above $440,000 of income.
Hurdle #3: Meet income tax qualifications
To claim the entire $2,200 child tax credit, you must owe at least $2,200 of income tax. For example, if you owe $3,000 in taxes and have one child that qualifies for the credit, you can claim the entire $2,200 credit. But if you only owe $1,000 in taxes, the maximum amount of the child tax credit you can claim is $1,700.
Take the tax credit…but get help!
The bottom line is that tax credits are usually more valuable than tax deductions. But tax credits also come with lots of rules that can be confusing. Please call to schedule a tax planning session to make sure you make the most of the available tax credits for your situation.
Couples often name money as a major source of tension – but it can also become one of your greatest tools for building trust and momentum together. When approached intentionally, money stops being a stressor and starts becoming a strategy. Here are some ideas for creating financial harmony with your long-term partner or spouse.
Be radically transparent. Honesty about money should start early. Both partners should understand the full financial picture including income, debts, savings, investments, and credit history, says everydayhealth.com. Major obligations such as student loans, credit card balances, or family financial responsibilities should never come as a surprise years into the relationship. Secrecy around money erodes trust quickly.
Transparency also extends beyond numbers. Spending habits, avoidance tendencies, and emotional triggers around money matter just as much as account balances.
Have recurring future-focused conversations. Make space for proactive conversations about where you are headed financially. Children, career moves, business ventures, caregiving, travel, and retirement all carry financial implications. If your long-term visions drift apart, put them back on a common course.
According to Mutual of Omaha, consider revisiting these discussions periodically. Goals and priorities evolve, and staying aligned requires ongoing communication.
Understand each other’s financial comfort zones. Two people can earn the same income yet feel very different levels of security, says the financial tech company Beem.com. One may view a mortgage or low-interest loan as practical, while the other prefers minimal debt and maximum stability.
Talk through specific scenarios, for example how much savings feels safe, what level of debt is acceptable, and what qualifies as a splurge. These conversations reveal deeper beliefs about risk and security. The objective is not to win the argument, but to understand each other’s reasoning.
Divide responsibilities, but build shared competence. One partner may enjoy the details while the other prefers strategy. Divide responsibilities accordingly, but avoid letting one person disengage completely, suggests The Gottman Institute.
Whether it is paying bills, managing investments, or meeting with advisors, both partners need to understand the accounts, obligations, and key documents. This includes access to the accounts in case of an unforeseen health event.
Turn conflict into collaboration. Disagreements are inevitable. One partner may prioritize experiences, while the other focuses on saving or upgrading practical needs. Rather than turning these moments into battles, the website theknot.com says to approach them as shared design challenges. Look for solutions that respect both security and enjoyment – perhaps adjusting the scale of a purchase or setting aside personal spending allowances.
When couples approach money as a shared strategy rather than a recurring argument, something powerful happens. Financial discussions stop feeling like threats and start feeling like planning sessions for a future you are intentionally building together.
Filing your 2025 tax return may feel like crossing a finish line. In reality, this moment is the starting point for smart tax planning during 2026. Here are several ideas to kick start your own tax planning cycle.
If you get a big refund, adjust your withholdings. A large refund may feel rewarding, but it often means you gave the government an interest-free loan all year. This money could have supported debt reduction, savings, or investments, instead. After filing, revisit your Form W-4 and run a projection for 2026. Fine-tuning your withholding improves monthly cash flow and reduces the likelihood of over-correcting later in the year.
If you have a big tax bill, review estimated tax payments. A significant balance due is more than an inconvenience. It may signal under-withholding or insufficient quarterly estimates. Early in the year is the ideal time to correct course. Review income sources, especially self-employment, investment, or bonus income, and adjust estimated payments accordingly.
Plan now to take advantage of the $1,000 above-the-line charitable donation deduction. With an above-the-line charitable deduction available ($2,000 for married couples), thoughtful giving becomes even more strategic. Consider your cash flow to optimize the timing of donations. Spreading contributions across the year may make budgeting easier, while ensuring you fully utilize the deduction.
Review retirement contribution limits for 2026. Confirm contribution limits for IRAs, 401(k)s, and other qualified plans for 2026, and evaluate whether you can increase deferrals. Even modest monthly adjustments can significantly reduce taxable income over the course of a year. Starting early also makes it easier to reach maximum contribution thresholds without straining year-end cash flow.
Plan HSA contributions and medical expenses. Health Savings Accounts offer a rare triple tax benefit – deductible contributions, tax-free growth, and tax-free qualified withdrawals. Review eligibility, contribution limits, and anticipated medical expenses for 2026. Coordinating planned procedures, prescriptions, or ongoing care with your funding strategy can enhance the tax benefit while keeping healthcare spending organized and predictable.
Take into account life events. Major life changes often reshape your tax profile. Marriage can alter filing status and bracket exposure. Divorce may affect dependency claims and support payments. A new child can unlock credits and deductions. Anticipating these shifts allows you to update withholding, adjust estimated payments, and plan eligibility for credits before the year unfolds.
Pay attention to no tax on tips and overtime. Accurate tracking becomes essential if you receive tip and/or overtime income. Confirm how your employer reports this income and ensure payroll systems reflect proper treatment. Employers and business owners must also review compliance procedures. Understanding how these earnings are classified early in the year helps prevent reporting errors and maximizes any available benefit.
The most effective tax strategies are built early. Use your filed 2025 tax return as a starting point, make adjustments now, and give your 2026 plan room to work in your favor.
Fraud and embezzlement don’t just happen at large companies. In fact, theft may be more common in small businesses because many lack internal controls that are typically in place at larger organizations. But the good news is that effective internal controls don’t have to be complicated or expensive.
The best way for your business to battle fraud is to create a segregation of duties framework. With segregation of duties, you split the responsibilities for each of three different areas: authorization of cash expenditures, physical custody of cash and reconciliation of cash expenditures to different individuals.
Here’s what you need to know:
Segregate cash disbursements. Payment responsibilities should never rest with a single individual. One employee should review and approve vendor bills, while another processes the payment. The person preparing checks should not have authority to sign them. Electronic payments and fund transfers require similar separation – one person initiates the transaction, another reviews the details, and a separate, authorized manager gives final approval. The same layered approach applies to purchase orders: one team member issues or requests the order, another approves it, and payment is released only after proper review. Dividing these duties ensures management has visibility into how funds are spent and significantly reduces the risk of error or misappropriation.
Segregate control of cash. Have an owner or manager occasionally spot check incoming electronic transactions and tie them to the company bank account. If you receive physical checks, have an owner or manager open the mail before passing it on to accounting. That’s one way to detect unusual transactions before they’re recorded in the company books. Alternatively, you might ask someone separate from accounting to open the mail and prepare a deposit slip, or prepare a daily reconciliation of all transactions.
Pay special attention to ACH receipts. Unlike physical checks which leave a paper trail and involve multiple handling steps, ACH payments post directly to a bank account without anyone physically touching the money. This convenience reduces natural oversight points. If the same person has access to online banking and records receipts in the accounting system, errors or intentional misstatements may go undetected.
Segregate reconciliations. For companies with limited resources, a periodic review of bank reconciliations by someone outside of accounting can provide a mitigating control. Non-accounting personnel performing these reviews will need to be trained. They’ll need to understand the risks involved and the types of unusual or unsupported transactions needing further investigation. Cross training staff also helps to ensure continuity of operations when accounting employees take vacations or leave the company. Or better yet, bring in an outside accounting expert to conduct periodic audits of key functions.
Management by wondering around. As an owner, periodically review your bank accounts and the activity in them. Ask questions about transactions that are large. Even if you already know the answer, your team will know you are looking. The same goes with your general ledger. Get access to the ledger and periodically look at the details behind an account or two. You may be surprised what you find. Again, your questions will show your engagement and the randomness of this activity will serve as a simple audit technique.
Segregation of duties can help your company keep track of cash and help prevent theft by an employee before it happens.
This year marks 250 years of American independence, which also means two-and-a-half centuries of spirited debate over taxes. From the nation’s earliest days, revenue has been raised in inventive, controversial, and occasionally head-scratching ways, often followed closely by creative attempts to avoid it. To mark this anniversary, our annual tax quiz explores the lesser-known, stranger corners of U.S. tax history.
In the 1790s, the federal government imposed a tax that sparked armed resistance in western Pennsylvania. What was the tax actually on?
A. Horse ownership B. Whiskey distillation C. Imported tea D. Playing cards
B – The Whiskey Tax wasn’t aimed at casual drinkers but at distillers, many of whom were small frontier farmers turning grain into shelf-stable income. To them, the tax felt like a coastal money grab, and protests escalated into the Whiskey Rebellion. George Washington personally led troops to put it down, proving two things early on – the federal government would enforce tax laws, and Americans would complain loudly about them.
During the Civil War, Congress briefly experimented with a federal income tax. What was one unexpected thing taxpayers were allowed to deduct?
A. Bribes paid to avoid the draft B. The cost of hired farm labor C. Losses from shipwrecks D. Beard-grooming expenses
C – Shipwreck losses. In an era when commerce moved by sea and river, losing a shipment to a wreck was a real business risk. The government recognized this long before it figured out depreciation schedules or standardized forms. Sadly for the bearded, personal grooming never made the cut.
In the early nineteenth century, tariffs were the federal government’s main revenue source. Which item was once considered so politically dangerous to tax that it helped trigger a constitutional crisis?
A. Wool coats B. Iron nails C. Imported hats D. Cheap British textiles
D – Cheap British textiles. Protective tariffs raised prices on imported cloth to support American manufacturers, but Southern states relied heavily on imports and exports. The resulting tariff fights fueled the Nullification Crisis, where South Carolina flirted with ignoring federal law entirely. It turns out fabric can tear a nation, metaphorically and almost literally.
Before payroll withholding existed, how did many Americans pay their income taxes during World War II?
A. By mailing cash in envelopes B. Through quarterly visits from IRS agents C. In a single painful lump sum D. With war bonds only
C – One lump sum. Taxpayers were expected to save throughout the year and then pay all at once, which went about as well as you’d expect. Withholding was introduced partly to fund the war efficiently and partly to stop widespread shock, confusion, and strongly worded letters to Washington, D.C.
In 1895 the Supreme Court ruled a federal income tax was unconstitutional. What was the main reason?
A. It unfairly targeted farmers B. It violated states’ rights C. It wasn’t apportioned among the states D. Congress forgot to define income
C – Apportionment. The Constitution required certain taxes to be divided among states based on population, not income. The income tax didn’t do that, so it failed on technical grounds. The 16th Amendment later fixed this, proving that sometimes the solution to tax problems is more paperwork at the federal level.
At various points in U.S. history, Congress has taxed purely to change behavior rather than raise money. Which of these was explicitly intended to discourage its use?
A. Colored margarine B. Wooden houses C. Cheap paper D. Public theaters
A – Colored margarine. To protect dairy farmers, from the 1880s to 1950 Congress taxed margarine that was artificially colored to look like butter. The result was grayish margarine and widespread consumer resentment. Eventually, common sense – and better food science – prevailed.
How Did You Score?
5 – 6 correct: You could probably audit the 18th century. Historians salute you, accountants trust you, and the IRS would like to know your availability for consulting.
3 – 4 correct: You may not be ready to draft tax policy, but you’d absolutely survive a colonial tavern debate about whiskey taxes.
1 – 2 correct: Consider this your official introduction to the wonderfully strange world of U.S. tax history, and a reminder that some of these questions would have puzzled people in the actual centuries they happened.
Saving for retirement is not a one size fits all journey, as each stage of life comes with different priorities, pressures, and opportunities. No matter where you are in your journey, here are savings tips from established financial publications and organizations to consider for every age.
In Your Twenties – Building Early Habits
For many people, this decade is less about large balances and more about establishing patterns. Financial education outlets frequently emphasize the long runway available to younger savers. Investopedia.com discusses the long term impact of starting early and allowing time to work in your favor.
Common themes during this stage include:
Developing a regular saving habit, even in small amounts
Exploring employer sponsored retirement plans, when available
Learning basic investment concepts over time
Treating retirement contributions as part of monthly expenses
Expanding skills and experience that may increase earning potential
In Your Thirties – Adding Structure
As careers and family responsibilities grow, retirement planning often becomes more deliberate. For example, Charles Schwab provides a decade-by-decade overview of how retirement priorities may shift during this phase of life.
Conversations during this decade often revolve around:
Reviewing contribution levels as income changes
Understanding how employer matching programs work
Paying attention to debt and interest costs
Considering how lifestyle decisions shape long term finances
Evaluating career growth or additional income opportunities
In Your Forties – Taking Inventory
Mid-career can be a natural time to assess progress and revisit long term projections. Many financial institutions have programs that address these topics.
Topics frequently discussed include:
Reviewing current balances alongside projected needs
Understanding how high interest debt may affect cash flow
Identifying gaps between current savings and future income goals
Revisiting contribution levels and investment allocations
Checking Social Security earnings records for accuracy
Considering whether new income streams may strengthen retirement readiness
In Your Fifties and Sixties – Focus on the Finish Line
As retirement moves closer, planning conversations often shift toward income timing and lifestyle expectations. AARP maintains a retirement resource center that covers considerations commonly discussed in the years leading up to retirement.
Areas that frequently come into focus include:
Continuing to save where possible
Eliminating or reducing outstanding debt
Thinking through retirement timelines and income sources
Factoring healthcare and lifestyle preferences into cost expectations
Clarifying what retirement may look like day to day
Timeless Principles That Apply at Any Age
No matter where you fall on the timeline, a few core ideas always support progress.
Automate savings to remove decision fatigue
Avoid comparing your progress to others with different circumstances
Revisit your plan occasionally rather than ignoring it entirely
Focus on what you can control today
The Bottom Line – Start Where You Are
Retirement planning is not about catching up to someone else’s path. It is about making the best decisions you can with the resources you have right now. Wherever you are starting from, taking action today creates options for tomorrow.
With the individual tax-filing deadline on Wednesday, April 15th, now is the time to complete all filing arrangements and payments.
What follows is information typically provided in our filling instructions to you when the tax return is completed.
However, upon review, it makes sense to provide this information to everyone, whether you have filed or not. It is good information to know, so if you have not already done so, ask yourself these questions:
Did you sign your e-file authorization form? IRS Form 8879 needs to be signed by you before your taxes can be e-filed. If filing jointly, your spouse needs to sign as well. If you haven’t already, please return the signed form ASAP to ensure that your taxes can be e-filed on time. But don’t sign it before reviewing the tax return. Remember, this signature means you agree with the accuracy of the tax return.
Do you need more time to file? If you are not ready to file your taxes before the initial April 15th deadline, you can file for a six-month extension. Be aware that it is only an extension of time to file – not an extension of time to pay taxes you owe. You still need to pay all taxes by April 15th!
Do you owe money? If yes, make your tax payment now! The IRS has several payment options on their website. If mailing a payment, include Form 1040-V and ensure the mail is postmarked on or before April 15th. Sending the payment by certified mail will ensure you have proof of a timely payment. Late payments, even by one day, are subject to IRS penalties and interest.
Do you need to deposit funds in your IRA or HSA? Did you claim an IRA or HSA contribution on your tax return? In order for the deduction to be valid for 2025, all deposits to those accounts need to be made by April 15th. Once completed, save proof of the contribution with your 2025 tax files.
Do you need to make an estimated tax payment? The first quarter estimated tax payment for 2026 is also due by April 15th. If you owe taxes for 2025, making 2026 estimated payments might make sense for you. A quick way to calculate a first quarter payment is to divide the taxes you paid in 2025 by four, then adjust this number for any paycheck withholdings. Send your payment along with Form 1040-ES to the IRS by April 15th. Then schedule a tax-planning meeting to determine the best approach for the remainder of the year.
If you do miss a deadline, file your return and pay the taxes as soon as you can to stop the accruing of interest and penalties.
If you have children or grandchildren, you have an opportunity to give them a jump-start on their journey to becoming financially responsible adults. While teaching your child about money and finances is easier when you start early, it’s never too late to impart your wisdom. Here are some age-relevant suggestions to help develop a financially savvy young adult:
Preschool –Start by using dollar bills and coins to teach them what the value of each is worth. Even if you don’t get into the exact values, explain that a quarter is worth more than a dime and a dollar is worth more than a quarter. From there, explain that buying things at the store comes down to a choice based on how much money you have (you can’t buy every toy you see!). Also, get them a piggy bank to start saving coins and small bills.
Grade school –Consider starting an allowance and developing a simple spending plan. Teach them how to read price tags and do comparison shopping. Open a savings account to replace the piggy bank and teach them about interest and the importance of regular saving. Have them participate in family financial discussions about major purchases, vacations and other simple money decisions.
Middle school –Start connecting work with earning money. Start with activities such as babysitting, mowing lawns or walking dogs. Open a checking account and transition the simple spending plan into a budget to save funds for larger purchases. If you have not already done so, now is a good time to introduce the importance of donating money to a charitable organization or church.
High school –Introduce the concept of net worth. Help them build their own by identifying their assets along with their current and potential liabilities. Work with them to get a part-time job to start building work experience, or to continue growing a business by marketing for more clients. Add additional expense responsibility by transferring direct accountability for things like gas, lunches and the cost of going out with friends. Introduce investing by explaining stocks, mutual funds, CDs, and IRAs. Talk about financial mistakes and how to deal with them when they happen by using some of your real-life examples. If college is the goal after high school, include them in the financial planning decisions. Tie each of these discussions into how it impacts their net worth.
College –Teach them about borrowing money and all its future implications. Explain how credit cards can be a good companion to a budget, but warn them about the dangers of mismanagement or not paying the bill in full each month. Discuss the importance of their credit score and how it affects future plans like renting or buying a house. Talk about retirement savings and the importance of building their retirement account.
Knowing about money – how to earn it, use it, invest it, and share it – is a valuable life skill. Simply talking with your children about its importance is often not enough. Find simple, age-specific ways to build their financial IQ. A financially savvy child will hopefully lead to a financially wise adult.
A new wave of technology is quietly reshaping the world. Here are several tech breakthroughs you should know about that are real, rising fast, and ready to impact your life.
Spatial Computing: The Next Digital Frontier
Imagine putting on a pair of glasses and seeing digital objects pop into your real world like a coworker sitting across from you, a 3D model floating in your living room, or step-by-step repair instructions hovering over a broken appliance. This is spatial computing. It’s a mix of augmented reality, virtual reality, and motion tracking that lets technology understand physical space like we do. Companies like Apple are already betting big on it, but it’s not just for gamers or techies.
What it means for you: You could soon try on clothes without stepping into a store, design your kitchen in 3D before you remodel, or learn new skills in fully interactive virtual spaces.
Availability: Still expensive and not yet mainstream, but real and in use.
Digital Twins: Virtual Copies That Think Like the Real Thing
A digital twin is a high-tech copy of something real like a building, a car engine, a factory, or even your body, recreated in virtual space and fed real-time data. These virtual versions let engineers, doctors, and city planners test ideas, spot problems, and predict outcomes without ever touching the real thing. Airlines use them to monitor jet engines mid-flight. Hospitals use them to plan surgeries. Entire cities are building digital twins to manage traffic, pollution, and energy use.
What it means for you: Behind the scenes, digital twins will help make your world run smoother – from shorter wait times at the doctor to fewer traffic jams on your commute.
Availability: You’re unlikely to use one directly, but cities, hospitals, and industries around you may already be using them.
Wearable Tech: Smart Devices That Stick With You
Wearable technology has come a long way from step counters and smartwatches. Today’s wearables can track your heart rate, stress levels, sleep cycles, hydration, even blood sugar, all from patches, rings, or tiny sensors you barely notice. Some are worn on the skin, others are woven into clothes, and a few are even exploring brainwave monitoring to boost focus or improve sleep. This new wave of wearables isn’t just about fitness, it’s about full-body awareness and personalized health.
What it means for you: Your next health checkup might start on your wrist or your skin, helping you catch problems early, manage stress, and optimize how you feel day to day.
Availability: More advanced devices like smart tattoos or neural wearables are in R&D or early trials.
Quantum Computing: The Next Leap in Brainpower
Quantum computers don’t think like normal computers. Instead of using bits that are either 0 or 1, they use qubits, which can be both 1s and 0s at once, thanks to the strange rules of quantum physics. This allows quantum machines to explore many possibilities at the same time, making them incredibly powerful for solving complex problems. Scientists are already using them to model new molecules, test climate scenarios, and explore next-gen encryption.
What it means for you: In the near future, quantum breakthroughs could speed up drug discovery, protect your data with ultra-secure encryption, and help tackle global challenges we can’t solve with today’s tech.
Availability: Most quantum computers still live in research labs, but tech giants are racing to bring them into the real world.
These technologies aren’t science fiction, they’re already taking shape. And as they evolve, they’ll continue changing how we live, work, and connect.
Like a bundle of sticks, good business partners support each other and are less likely to crack under strain together than on their own. In fact, companies with multiple owners have a stronger chance of surviving their first five years than sole proprietorships, according to U.S. Small Business Administration data.
Yet sole proprietorships are more common than partnerships, making up more than 70 percent of all businesses. That’s because while good partnerships are strong, they can be a challenge to successfully get off the ground. Here are some of the ingredients that good business partnerships require:
A shared vision. Business partnerships need a shared vision. If there are differences in vision, make an honest effort to find common ground. If you want to start a restaurant, and your partner envisions a fine dining experience with French cuisine while you want an American bistro, you’re going to be disagreeing over everything from pricing and marketing to hiring and décor.
Compatible strengths. Different people bring different skills and personalities to a business. There is no stronger glue to hold a business partnership together than when partners need and rely on each other’s abilities. Suppose one person is great at accounting and inventory management, and another is a natural at sales and marketing. Each is free to focus on what they are good at and can appreciate that their partner will pick up the slack in the areas where they are weak.
Defined roles and limitations. Before going into business, outline who will have what responsibilities. Agree on which things need consensus and which do not. Having this understanding up front will help resolve future disagreements. Outlining the limits of each person’s role not only avoids conflict, it also identifies where you need to hire outside expertise to fill a skill gap in your partnership.
A conflict resolution strategy. Conflict is bound to arise even if the fundamentals of your partnership are strong. Set up a routine for resolving conflicts. Start with a schedule for frequent communication between partners. Allow each person to discuss issues without judgment. If compromise is still difficult after a discussion, it helps to have someone who can be a neutral arbiter, such as a trusted employee or consultant.
A goal-setting system. Create a system to set individual goals as well as business goals. Regularly meet together and set your goals, the steps needed to achieve them, who needs to take the next action step, and the expected date of completion.
An exit strategy. It’s often easier to get into business with a partner than to exit when it isn’t working out. Create a buy-sell agreement at the start of your business relationship that outlines how you’ll exit the business and create a fair valuation system to pay the exiting owner. Neither the selling partner nor the buying partner want to feel taken advantage of during an ownership transition.
