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Tax Credits for Your Family

by Author: Jade Lloyd

#AD This Tax credits feature is a collaborative post. 

When you are raising a family, you know the importance of making sure that your hard-earned dollars stretch as far as they can. Between rising rents and home ownership costs, increases in utility bills and the high cost of child care and after school activities it’s getting more difficult to make ends meet. You need to take advantage of any breaks that are offered.

One of the ways that you can make the most of your finances is to pay careful attention to changes to the tax code. Every year there are new ways to save money if you are savvy and do some tax research and planning. It’s wise to use an online tax calculator to estimate your tax refund and to see what deductions and credits will be available when you file your taxes. Detailed information on credits and deductions is available online.

Child Tax Credit

If you have a child or children under the age of 17 and meet certain criteria, you can save considerable money by using a child tax credit. You qualify if the child did not provide more than half of her or his own financial support and is claimed as a dependent on your return. They must also meet the residency test, meaning they lived with you for over half the year. You will receive a $2,000 credit for each child, so if you have three children under 17 who meet the criteria you would receive a $6,000 credit. Each child will need a Social Security number for you to claim them on your taxes.

Child and Dependent Care Credit

Paying for full time or after school child care is so very expensive these days. Fortunately, there is a valuable tax credit you can take advantage of. If you pay for child care for a child or children under the age of 13 you may qualify for a credit for the costs of dependent care. In order to claim this credit, you must be working or looking for work.

As part of this credit you can recover up to 35% of the cost of dependent care of $3,000 for one child and care costs of $6,000 for two or more children. This can result in a tax credit of $1,050 or $2,100 respectively. You should review the detailed information about Child and Dependent Care Credits to make sure you follow all applicable provisions.

Earned Income Credit

Many working families can benefit from the Earned Income Tax Credit (EITC). This credit is applicable if your family has an income below $50,162 for a single or $55,952 for married filing jointly. The credit is substantial, and could be up to $6,557 if you have three or more children. If you have one child and qualify for the credit the amount is in the $3,500 range.

Tax credits are very valuable because they directly offset the amount of taxes you will owe. By taking advantage of the credits available for families you can save a tremendous amount of money and take care of your family’s financial future.

 

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