Taxation Tacos – Check Out These Tax Benefits for Parents

Taxation Tacos – Check Out These Tax Benefits for Parents


Taxpayers with children may qualify for certain
tax benefits. Parents should consider child-related tax benefits when filing their federal tax
return: Dependent. Most of the time, taxpayers can
claim their child as a dependent. Use the Interactive Tax Assistant to help determine
who can be claimed as a dependent. Taxpayers can generally deduct $4,050 for each qualified
dependent. If the taxpayer’s income is above a certain limit, this amount may be reduced.
For more on these rules, see Publication 501, Exemptions, Standard Deduction and Filing
Information. Child Tax Credit. Generally, taxpayers can
claim the Child Tax Credit for each qualifying child under the age of 17. The maximum credit
is $1,000 per child. Taxpayers who get less than the full amount of the credit may qualify
for the Additional Child Tax Credit. Use the Interactive Tax Assistant to determine if
a child qualifies for the Child Tax Credit. For more information, see Schedule 8812 and
Publication 972, Child Tax Credit. Child and Dependent Care Credit. Taxpayers
may be able to claim this credit if they paid for the care of one or more qualifying persons.
Dependent children under age 13 are among those who qualify. Taxpayers must have paid
for care so that they could work or look for work. Use the Interactive Tax Assistant to
determine if a child qualifies for the Child Tax Credit. See Publication 503, Child and
Dependent Care Expenses, for more on this credit. Earned Income Tax Credit. Taxpayers who worked
but earned less than $53,505 last year should look into the EITC. They can get up to $6,269
in EITC. Taxpayers may qualify with or without children. Use the 2016 EITC Assistant tool
at IRS.gov or see Publication 596, Earned Income Tax Credit, to learn more.
EITC and ACTC Refunds. Because of new tax-law change, the IRS cannot issue refunds before
Feb. 15 returns that claim the Earned Income Tax Credit (EITC) or the Additional Child
Tax Credit (ACTC). This applies to the entire refund, even the portion not associated with
these credits. The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However,
the IRS expects the earliest of these refunds to be available in bank accounts or debit
cards during the week of Feb. 27, as long as there are no processing issues with the
tax return and the taxpayer chose direct deposit. Read more about refund timing for early EITC/ACTC
filers. Adoption Credit. It is possible to claim a
tax credit for certain costs paid to adopt a child. For details, see Form 8839, Qualified
Adoption Expenses. Education Tax Credits. An education credit
can help with the cost of higher education. Two credits are available: the American Opportunity
Tax Credit and the Lifetime Learning Credit. These credits may reduce the amount of tax
owed. If the credit cuts a taxpayer’s tax to less than zero, it could mean a refund.
Taxpayers may qualify even if they owe no tax. Complete Form 8863, Education Credits,
and file a return to claim these credits. Taxpayers can use the Interactive Tax Assistant
tool on IRS.gov to see if they can claim them. Visit the IRS’s Education Credits web page
to learn more on this topic. Also, see Publication 970, Tax Benefits for Education.
Student Loan Interest. Taxpayers may be able to deduct interest paid on a qualified student
loan. They can claim this benefit even if they do not itemize deductions. Use the Interactive
Tax Assistant to determine if interest paid on a student or educational loan is deductible.
For more information, see Publication 970. Self-employed Health Insurance Deduction.
Taxpayers who were self-employed and paid for health insurance may be able to deduct
premiums paid during the year. See Publication 535, Business Expenses, for details.
Get related forms and publications on IRS.gov. All taxpayers should keep a copy of their
tax return. Beginning in 2017, taxpayers using a software product for the first time may
need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify
their identity. Taxpayers can learn more about how to verify their identity and electronically
sign tax returns at Validating Your Electronically Filed Tax Return.

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