Phoenix Accountant | Tax Savers
Children are expensive, but at least they can help save a little bit off that tax bill at the end of the year. If you’re a parent, here are several tax benefits you should be on the lookout for this tax year.
- Dependents – In most cases, you claim you children as a dependent on your tax return. For each dependent you are entitled to claim, you will receive a $3,950 deduction from your gross income. This deduction amount begins to phase out for higher income tax payers.
- Child Tax Credit – You may be able to claim a Child Tax Credit for each of your qualifying children. The child must be under the age of 17 to qualify for this credit. The maximum credit allowed is $1,000 per child and it also phases out for higher income tax payers.
- Additional Child Tax Credit – If you don’t have any tax owed, you may still reap the benefits of the Child Tax Credit via the refundable Additional Child Tax Credit. The maximum is $1,000 total per child between the non-refundable and refundable credits. You can check here for more information on this credit.
- Child and Dependent Care Credit – If you pay for child care for a dependent child under the age of 13 so that you can go to work or look for work, then you qualify for this credit.
- Earned Income Tax Credit – Workers who earn less than $52,427 may qualify for an Earned Income Tax Credit worth up to $6,143.
- Adoption Credit – You may be eligible for a tax credit for certain expenses paid in connection with adopting a child.
- Education Tax Credits – If you pay the education expenses for a dependent child, you may be eligible for either the American Opportunity Tax Credit or the Lifetime Learning Credit. If the credit reduces your tax liability to $0, the credit might be refunded.
If you have any questions or would like to discuss this further, feel free to contact us at Dusseau & Makris, PC, your Phoenix CPA firm.