Whether you are an individual taxpayer or a business, every dollar counts. At the end of the day, you want to make sure that you do not drain your finances. Whenever possible, you want to take all the legitimate deductions you can to minimize your tax bills.
There are many ways to reduce your taxes and one is through tax-credits.
A tax-credit program is a tax incentive designed to reward individual taxpayers or businesses to subtract the amount of taxes they owe to the government. Unlike tax deductions which reduce the amount of taxable income, tax-credits reduce the actual amount of taxes you owe.
In the U.S, there are several tax-credits available for individuals and businesses. For individuals, some of these include Family and Dependent credits, Income and Savings credits, Healthcare credits, and Homeowner credits.
There is also what we call a tax-credit scholarship program where individuals and business owners can reduce the amount of taxes they owe when they contribute or donate to scholarship-granting organizations or non-profit organizations that provide private school scholarships. In exchange for the individual taxpayer’s or business owner’s contribution, they can receive a tax-credit from the state.
These scholarship tax-credit programs vary in amount and percentage of credits awarded. Some states only allow businesses to participate, while another state encourages individuals to contribute too. Either way, an individual or a business should be able to meet the eligibility requirements for an opportunity scholarship tax-credit.
What are the benefits of a tax-credit scholarship program?
It supports the development of educational programs in schools and communities.
Schools that need funding will be able to develop more educational programs for students, especially those who come from underprivileged families. These programs also help schools to identify families in-need within their communities. Ultimately, it will provide opportunities to many deserving students to have a choice in which schools are best for them.
It encourages more students to pursue higher education.
When a child receives a good education and better opportunities, there is a bigger chance for him or her to pursue higher education. Eligible students who get funding from these programs will have more opportunities to improve their education and pursue higher education later on in life.
It helps organizations and schools to get funding.
Contributions coming from taxpayers can help change the landscape of the current education system. Many schools and scholarship organizations have limited financial resources to pursue their programs. Tax-credit programs provide financial resources to these schools and organizations to achieve their objectives.
It helps taxpayers lower their tax bills while helping students in their communities.
Tax-credit scholarship programs greatly benefit taxpayers when it comes to paying their tax bills. Tax-credit programs in general are a way of rewarding taxpayers and this incentive encourages taxpayers to actually comply and pay what they owe. It is worth noting that tax-credits only have value for taxpayers. Thus, when these programs are available, it benefits the taxpayers and the students they are helping in their communities.