In a recent post, we covered tax deductions and explained how they can reduce your income taxes. Tax credits can also reduce your income taxes, but they function differently from deductions. Understanding income tax credits for CRE professionals is essential for brokers, landlord reps, developers, and corporate real estate professionals who want to keep more of what they earn. Unlike deductions, which reduce the amount of income that is taxed, tax credits directly reduce the tax you owe. Some credits are even refundable, meaning they can reduce your tax liability below zero — resulting in a refund from the IRS.
This article highlights the income tax credits most relevant to CRE professionals, especially those with variable income, dependents, or ongoing education and licensing needs. Because tax credits often change as government policy shifts, it’s important to stay informed each year.
Work, Income, and Retirement‑Relevant Credits
The Premium Tax Credit helps to cover the cost of health insurance for people who buy health insurance through the Health Insurance Marketplace. This tax credit can significantly reduce your premiums. You can take it in advance so that your monthly health insurance payments are lower. However, if you do this, you will have to do a reconciliation based on your final income for the year; this will be part of your income tax return. This is best for self-employed brokers, small team owners, and 1099/independent contractors who purchase their health insurance through the Marketplace.
The Retirement Savings Contributions Credit, also known as the Saver’s Credit can be useful in off-years when your income is lower. Depending on your adjusted gross income, you may be eligible for a credit ranging from 10% to 50% of the amount you contributed to retirement accounts during the year. This credit is capped at $1,000 for single filers and $2,000 for married filing jointly. This is best for independent brokers, early-career professionals, and anyone with fluctuating commissions.
Family‑Oriented Credits (Common for Mid‑Career CRE Pros)
The Child Tax Credit provides up to $2,200 per qualifying child under the age of seventeen. Qualifying children must have a Social Security number and must live with you for more than half of the year. This credit begins to phase out with AGI over $200,000 for singles and $400,000 for married couples filing jointly.
Even when your child is over seventeen, you may still qualify for the Credits for Qualifying Children and Other Dependents. This credit is up to $500 and can be used for other dependents, such as college students. This too is subject to AGI limits.
The Child and Dependent Care Credit provides a credit toward the expenses you incur for care that allows you to work. This applies to children under age 13 and others who are physically or mentally incapable of caring for themselves. This credit covers 20% to 35% of your expenses. It caps out at $3,000 for one dependent and $6,000 for two or more dependents.
The Adoption Credit allows you to claim up to $17,670 per child for adoptions finalized in 2026. Qualifying expenses include adoption fees, attorney costs, court fees, and travel expenses. In some cases, the credit can be carried forward for up to five years. This credit starts phasing out when your modified AGI is over $265,080 and completely phases out at $305,080.
Education‑Related Credits
The Lifetime Learning Credit is a flexible education-related credit. It is not limited to costs of undergraduate college students and is not limited to people under age 24. You can use this credit to help cover required continuing education or other certificates or graduate programs that you pursue. This is limited to $2,000 per tax return. Your modified AGI must be less than $90,000, ($180,000 if married filing jointly).
The American Opportunity Tax Credit is geared toward undergraduate college education. The credit is up to $2,500 per qualifying student per year. So if you have multiple children in college at the same time, you can use credit for each child. Again, your modified AGI must be less than $90,000, ($180,000 if married filing jointly).
How We Help Clients With Income Taxes
At Dominion Financial Advisors, we are not accountants or tax preparers. We don’t prepare or file income tax returns. That is a backward-looking approach: it tells you how much tax you owe based on what you did and earned last year. Instead, we take a forward-looking approach. We help you plan your income and tax-related options going into the future, so that you have a plan that allows you to keep more of your money instead of sending it to the IRS. We can help you build and implement a future-oriented financial plan to help you avoid unexpected mistakes and regrets. Schedule a complimentary consultation today.