1 year, 2 months ago
How can tax write-offs help my credit?
What tips, tricks or strategies allow tax write-offs to help raise my credit scores? Is it possible for tax write-offs to help raise my credit worthiness?
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M$1 Answer
Taxes are a fairly small part of your overall credit picture, so there really isn’t much impact that tax credits or tax write-offs will have directly on your credit score. Here are the two situations that I can think of where tax credits could link with credit.
Tax Debt – Tax liens, back taxes, etc. are all forms of debt. While some of these might not show up on your credit report, they are still debt and will likely impact your ability to pay off other debt (which will impact your credit). Tax credits can help lower your tax liability and pay off those debts.
Money Back – Tax credits will help you get closer to a refund from the IRS, so in that regard, the more tax credits you have, the more money you will get back (or the less you will owe). That money could be used to pay debts which can help improve credit.
Tax Debt – Tax liens, back taxes, etc. are all forms of debt. While some of these might not show up on your credit report, they are still debt and will likely impact your ability to pay off other debt (which will impact your credit). Tax credits can help lower your tax liability and pay off those debts.
Money Back – Tax credits will help you get closer to a refund from the IRS, so in that regard, the more tax credits you have, the more money you will get back (or the less you will owe). That money could be used to pay debts which can help improve credit.
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