The IRS publishes several bulletins which contain useful information for tax payers with dependents – e.g parents, grand parents and guardians – that apply to many of my readers. I have summarized the key points below including references to related articles for the latest tax season.
Tax Benefits for Parents
- Dependents. In most cases, you can claim a child as a dependent even if your child was born anytime in the tax filing year. For more information, see the this article covering who you can claim claim as a dependent for exemptions and tax credits.
- Child Tax Credit. You may be able to claim the Child Tax Credit (CTC) for each of your children that were under age 17 at the end of the tax year. If you do not benefit from the full amount of the credit, you may be eligible for the Additional Child Tax Credit. For more information, see the this CTC/ACTC article with the latest qualification criteria.
- Child and Dependent Care Credit. You may be able to claim this credit if you paid someone to care for your child or children under age 13, so that you could work or look for work. See this article for more information on how this credit works and revised limits.
- Earned Income Tax Credit. If you worked but earned less than an IRS adjusted income threshold you may qualify for the EITC. If you have qualifying children (dependents), you may get up thousands of dollars extra back when you file a return and claim this credit. See this detailed EITC article to find out if you qualify and what the maximum payouts are
- Adoption Credit. You may be able to take a tax credit for certain expenses you incurred to adopt a child. For details about this credit, see the instructions for IRS Form 8839, Qualified Adoption Expenses.
- Higher education credits. If you paid higher education costs for yourself or another student who is an immediate family member, you may qualify for either the American Opportunity Credit (AOTC)or the Lifetime Learning Credit. Both credits may reduce the amount of tax you owe. If the American Opportunity Credit is more than the tax you owe, you could be eligible for a refund of up to $1,000. See IRS Publication 970, Tax Benefits for Education.
- Student loan interest. You may be able to deduct interest you paid on a qualified student loan, even if you do not itemize your deductions. For more information, see IRS Publication 970, Tax Benefits for Education.
Important Tax Filing Facts about Dependents and Exemptions
While each individual tax return is unique, there are some tax rules that affect every person who files a federal income tax return. These rules involve dependents and exemptions. The IRS has six important facts about dependents and exemptions