Taxpayers often focus on the personal tax deductions they can claim on their 1040s.

Strategy: Don’t ignore tax credits on the “back page.” While these tax breaks often fly under the radar, they can be more valuable than deductions. Unlike a deduction, a tax credit reduces tax liability on a dollar-for-dollar basis. Here are five of the biggest credit tax-savers on 2024 returns.

1. Engage in child’s play. You can claim a Child Tax Credit (CTC) of up to $2,000 for each qualified child. To be eligible, the child must: • Be under age 17 at the end of the year • Be your child, stepchild or qualified foster child • Not provide more than half of their own financial support during the year • Be a U.S. citizen, a U.S. national or a U.S. resident alien • Have lived with you for more than half of the year. However, the benefits of the CTC are phased out for higher-income taxpayers.

Tip: Of the maximum $2,000 credit, $1,400 is refundable.

2. Study education credits. The tax law gives you two shots at a tax credit for higher education expenses. But you must choose one or the other for a particular student. • The American Opportunity Tax Credit (AOTC) offers a maximum annual credit of $2,500 per eligible student for each of the first four years of undergraduate study. • The Lifetime Learning Credit (LLC) grants a maximum annual credit of $2,000, regardless of the number of students in the family. Both credits are phased out for higher-income taxpayers.

Tip: The AOTC is usually preferred because of the higher amount, but the eligibility rules for the LLC are much looser.

3. Take care of the kids. You can claim a credit for the cost of caring for an under-age-13 child while you (and your spouse, if married) work. The dependent care credit is 20% for taxpayers with an adjusted gross income (AGI) above $43,000. The credit is available for the first $3,000 of qualified expenses for one eligible child or $6,000 of qualified expenses for two or more eligible children. Thus, the maximum credit is usually $600 or $1,200, respectively.

Tip: Costs of caring for other relatives—such as an elderly parent—may also qualify for the credit.

4. Embrace adoption credit. If you incurred eligible expenses while adopting a child in 2024, you may be entitled to a nonrefundable credit of up to $16,810. An “eligible child” is someone under age 18 or physically or mentally incapable of self-care. Qualified expenses include legal costs and other reasonable costs directly related to the adoption, including: • Adoption agency fees • Court costs • Attorneys’ fees • Travel costs (including meals and lodging) • Extra expenses needed to adopt a foreign child.

Tip: The credit is phased out for higherincome taxpayers.

5. Hatch a nest egg. The retirement saver’s credit encourages eligible newbies to set aside money for the future. It applies to the first $2,000 voluntarily contributed to a qualified plan, like a 401(k), or a traditional or Roth IRA. This nonrefundable credit may equal 50%, 20% or 10% of the qualified contribution, depending on the retirement saver’s income. Thus, the maximum credit is $1,000 (50% of $2,000).