Tax Savings Tips For Parents

Tax Savings Tips For Parents
Ask any new parent,​ and they will tell you​ that the​ costs associated with a​ new baby are many,​ everything from bottles to​ diapers to​ cribs,​ strollers,​ and high chairs,​ and all of​ this before the​ child even learns to​ walk and talk and beg you​ for a​ pair of​ $500 designer jeans .​
Parenting is​ one of​ the​ most rewarding,​ and important jobs that a​ person can have,​ in​ addition to​ being one of​ the​ most expensive .​
The good news is​ that there are two tax breaks offered by the​ federal government that the​ majority of​ parents can qualify for,​ which are the​ dependent exemption and the​ child tax credit.
The dependent exemption is​ a​ tax break that allows you​ to​ receive an​ additional tax deduction of​ as​ much as​ $3,​000 each year until your child turns 19 .​
This is​ addition to​ the​ standard tax exemption that the​ IRS allows per person to​ cover basic living expenses .​
Single people are allowed one exemption,​ while married couples have the​ option of​ taking two of​ these exemptions per year.
The amount that you​ will save with this exemption depends on​ your current tax bracket,​ and generally,​ the​ higher the​ tax bracket,​ the​ more money you​ will receive,​ unless your income is​ too high to​ claim an​ exemption,​ but again,​ most people will qualify .​
This dependent exemption is​ only phased out for married couples filing jointly with an​ adjusted gross income of​ more than $300,​000 .​
Limits for single parents exist as​ well,​ and it​ is​ important to​ research these limits,​ both for married and single parents,​ to​ be sure that your income does not exceed them .​
If you​ qualify for this exemption,​ you​ can simply fill out the​ required lines on​ your tax form,​ including an​ adoption taxpayer identification or​ social security number for each child.
The child tax credit is​ available for married couples filing jointly with a​ reported gross income of​ below $13,​000,​ although again,​ it​ should be noted that income limits for both single and married parents are revised frequently .​
With this credit,​ it​ is​ possible to​ receive up to​ $1,​000 per child .​
Determining the​ amount of​ credit that an​ individual can claim requires the​ completion of​ the​ child tax credit worksheet,​ which can be downloaded from the​ IRS website .​
You will need to​ provide a​ social security or​ adoption taxpayer identification number for each child in​ order to​ qualify .​
as​ with all tax information you​ should always check with a​ professional because tax laws can change every year.
Tax Savings Tips For Parents Tax Savings Tips For Parents Reviewed by Henda Yesti on July 02, 2018 Rating: 5

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