the tax you owe and end up paying $4,000 instead of $7,000. Not bad, eh? So, what are some common tax credits?

1. Education Tax Credits – The Hope and Lifetime Learning Credits are two different programs. The Hope is related to the payment of tuition for you, a spouse or dependent to go to college. It can be claimed for the first two years of college at an amount up to $1,650. The Lifetime Learning credit is similar and can be used to claim up to a $2,000 tax credit. Make sure to check the guidelines for each credit.

2. Adoption Tax Credit – Adoption is costly, but you can claim a huge tax credit of up to $10,690 in 2006. The eligibility rules, however, are complex so make sure to sit down with a quality tax prepare before claiming the credit. There is also a cap of $164,410 on total income you can earn if you hope to claim the credit.

3. Going Green – The government is trying to motivate people to uses more energy efficient cars and materials in your house. There are a bevy of credits available for everything from buying a hybrid vehicle to energy efficient windows to solar panels and so on. If you went green this year, make sure to check out your specific area with a CPA.

4. Retirement Savings Tax Credit – If you think people are nervous about the viability of social security in the long run, you should see the government. It is now offering a tax credit for anyone who earns less than $25,000 as a single filer or $50,000 as a joint filing and puts money in a retirement credit. In short, a double win for you. The tax credit can be as much as $1,000 depending on your filing status.

If you do not qualify for any of these common tax credits, do not worry. There are plenty of others out there that you might be able to claim. Even two tax credits can save you bundles on the tax you pay, so make sure you investigate the possibilities.

Richard A. Chapo is with BusinessTaxRecovery.com - providing information on tax credits.

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