Ten Tax Topics for Taxpayers with Tots and Teens
Got
Kids? They may have an impact on your tax situation. Listed below are
the top 10 things the IRS wants you to consider if you have children.
- Dependents In
most cases, a child can be claimed as a dependent in the year they were
born. For more information see IRS Publication 501, Exemptions,
Standard Deduction, and Filing Information.
- Child Tax Credit You may
be able to take this credit on your tax return for each of your
children under age 17. If you do not benefit from the full amount of
the Child Tax Credit, you may be eligible for the Additional Child Tax
Credit. The Additional Child Tax Credit is a refundable credit and may
give you a refund even if you do not owe any tax. For more information
see IRS Publication 972, Child Tax Credit.
- Child and Dependent Care Credit
You may be able to claim the credit if you pay someone to care for your
child under age 13 so that you can work or look for work. For more
information see IRS Publication 503, Child and Dependent Care Expenses.
- Earned Income Tax Credit
The EITC is a benefit for certain people who work and have earned
income from wages, self-employment or farming. EITC reduces the amount
of tax you owe and may also give you a refund. For more information see
IRS Publication 596, Earned Income Credit.
- Adoption Credit You may
be able to take a tax credit for qualifying expenses paid to adopt an
eligible child. For more information see the instructions for IRS Form
8839, Qualified Adoption Expenses.
- Children with Earned Income
If your child has income earned from working they may be required to
file a tax return. For more information see IRS Publication 501.
- Children with Investment Income
Under certain circumstances a child’s investment income may be taxed at
the parent’s tax rate. For more information see IRS Publication 929,
Tax Rules for Children and Dependents.
- Coverdell Education Savings Account
This savings account is used to pay qualified educational expenses at
an eligible educational institution. Contributions are not deductible,
however, qualified distributions generally are tax-free. For more
information see IRS Publication 970, Tax Benefits for Education.
- Higher Education Credits
Education tax credits can help offset the costs of education. The
American Opportunity and the Lifetime Learning Credit are education
credits that reduce your federal income tax dollar-for-dollar, unlike a
deduction, which reduces your taxable income. For more information see
IRS Publication 970.
- Student Loan Interest You
may be able to deduct interest you pay on a qualified student loan. The
deduction is claimed as an adjustment to income so you do not need to
itemize your deductions. For more information see IRS Publication 970.
For Tax help contact Jose Martinez at jose@pritaxes.com or Andrew Traynor CPA at Atraynor@pritaxes.com |
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