When the 2015 tax season comes around it is important to make sure that you are claiming all of the tax benefits that you are eligible for. Busy parents usually do not have much time to do the research to find out about all of the tax credits and exemptions available for them, therefore today we are listing the most popular ones to make sure your tax obligations are reduced as much as possible.
If you are a parent more than likely, you qualify for the dependent exemption. This exemption is $3,900 per child. This allows you to reduce your taxable income for the year. However, in order to claim this exemption you must have your child’s correct social security number.
Child and dependent care credit
If your child is under 13 and went to daycare last year, you could claim up to $1050 of childcare expenses for one qualifying child or up to $2100 for two or more dependents. To qualify the tax payer or payers have to have earned some type of income such as wages, tips, self-employment, income, etc. However, there is a loophole to this credit, if you are filing married filing jointly and one spouse is a full time student or legally unable to take care of themselves you can still claim this credit.
Earned income tax credit
The Earned Income Credit (EIC) is one of the refundable tax credits, which helps parents out a lot. The maximum credit for a family with three or more qualifying dependents is $6,044. To be eligible for this tax credit you just have to have a modified adjusted gross income (AGI) that is under $52,000.
Child tax credit
The Child Tax Credit is not the same thing as the Child and Dependent Care Credit. This tax credit is nonrefundable and can get you up to $1000 per qualifying child under the age of 17. If you owe taxes for the year, this tax credit allows you to reduce or eliminate your balance with the IRS. However, it does phase out if your AGI is more than $75,000 and you file single or you file jointly and make more than $110,000.
Adopting is a great way to expand your family. However, the costs that are associated with adopting a child are pricy. The good news is the IRS allows families to use this tax credit, which is worth up to $12,970. The expenses that are related to this tax credit include, adoption fees, traveling expenses directly in relation to the adoption, attorney fees, and court fees.
If you are a parent, there are many tax credits available for you to benefit from during tax season. The best thing is you do not have to know all of your eligible tax credits if you choose to file with Turbo Tax. Turbo Tax will ask you simple questions and automatically pull up all of the tax credits that you and your family are eligible for to insure that you are able to get your largest refund ever.