Tax Help Relief – Tax Savings Tips For Parents
Ask any new parent, and they'll 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 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 someone can have, in addition to being one of the most costly. The great news is that you will find two tax breaks offered by the federal government that the majority of parents can be eligible for, which are the dependent exemption and the child tax credit.
The dependent exemption is a tax break that permits you to receive an additional tax deduction of as much as $3,000 each year until your kid turns 19. This is addition to the standard tax exemption that the IRS allows per person to cover basic living expenses. Single people are granted one exemption, whereas married couples have the choice of taking two of these exemptions per year.
The amount that you will save with this exemption varies according to your current tax bracket, and usually, the higher the tax bracket, the more money you will receive, unless your income is too high to claim an exemption, but yet again, most individuals will qualify. This dependent exemption is just phased out for married couples filing jointly with an adjusted gross income of a lot more than $300,000. Limits for single parents exist too, and it's essential to research these limits, both for married and single parents, to be certain that your income doesn't exceed them. If you qualify for this exemption, you can merely 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 obtainable for married couples filing jointly with a reported gross income of less than $13,000, even though yet again, it ought to be observed that income limits for both single and married parents are revised frequently. With this credit, it is possible to receive as much as $1,000 per child.
Figuring out the amount of credit that a person can claim requires the completion of the child tax credit worksheet, which could be downloaded from the IRS web site. You'll need to supply a social security or adoption taxpayer identification number for each child to be able to qualify. As with all tax information, you should always check with a professional because tax laws can change each year.
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