The US Internal Revenue Service (IRS) reports that tax return season has begun. In fact, the campaign will run until April 15th, when all taxpayers in the country must file their returns based on the income they earned during the fiscal year.
For this regulation, there are two major types of tax options that can affect what each citizen owes: tax credits and tax deductions.
Tax credits, on the other hand, are typically a direct deduction from what each citizen who has filed a tax return owes, and the amount can sometimes be refunded back into the taxpayer’s account. However, a tax deduction reduces the total amount of income subject to state taxes.
With this in mind, here is a list of the ten most important tax credits and deductions in the United States for the year 2025 that all citizens who will be filing their tax returns with the IRS should know about.
Tax credits and deductions in 2025
The child tax credit is the primary tax benefit for families with children under the age of 18. In 2024, the child tax credit is up to $2,000 per child. What makes this credit so valuable is that even if you don’t owe any taxes, you can still receive up to $1,700.
The child tax credit is the primary tax benefit for families with children under the age of 18. In 2024, the child tax credit is up to $2,000 per child. What makes this credit so valuable is that even if you don’t owe any taxes, you can still receive up to $1,700.
For parents and families with children under the age of 13, or adults who are legally dependent. The credit can cover up to 35% of $3,000 in expenses for the first dependent. The maximum credit is $6,000 for two or more dependents.
The tax credit for opportunity reimburses taxpayers for the first $2,000 spent on tuition, books, fees, and equipment at universities and technical schools. This credit does not cover dormitories, apartments, or other housing or transportation expenses. However, up to $1,000 of the credit may be refundable based on owed taxes.
- Credit for lifelong learning
The lifelong learning credit for universities and technical schools provides a 20% credit for up to $10,000 in tuition, books, and fees. The credit has a maximum value of $2,000 and excludes housing, accommodation, and transportation expenses.
- Student Loan Interest Deduction
You can deduct up to $2,500 from your taxable income for student loan interest paid in the previous year.
- Adoption credit
Parents of adopted children can receive a tax break to help cover some of the qualified costs of the adoption process. The maximum value of this credit is $16,810 and decreases with increasing income.
- Charitable donations deduction
This deduction is only applicable to taxpayers who itemize their deductions on their tax returns. Charitable donations can generally be deducted up to 50% of adjusted gross income.
- Medical expense deduction
This deduction must be included in an itemized tax return. Taxpayers can deduct medical and dental expenses for themselves, spouses, or dependents that exceed 7.5% of their adjusted gross income.
- 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.
