Your children may help reduce the amount of taxes you owed for the year. Before you file your tax return, read below and find out if you qualify for one or more of these tax credits.
In most cases, you can claim your child as a dependent. You can deduct $4,050 for each dependent you are entitled to claim. You must reduce this amount if your income is above certain limits. For more on these rules, see Publication 501, Exemptions, Standard Deduction and Filing Information.
Child and Dependent Care Credit
You may be able to claim the Child and Dependent Care Credit if you pay someone to care for your children, age 13 or younger, so you can work or look for work. See Publication 503, Child and Dependent Care Expenses, for more on this credit.
Earned Income Tax Credit
You may be able to claim the Earned Income Tax Credit (EITC) with or without children. The EITC is a tax benefit for people who work and have earned income from wages, self-employment or farming. EITC reduces the amount of tax you owe and could give you a refund. To qualify, you must meet certain requirements and file a tax return, even if you do not owe any tax or are not required to file. You can qualify with or without children. You can get up to $6,269 in EITC. Go to the EITC page on IRS.gov and see Publication 596, Earned Income Tax Credit, to learn more.
Child Tax Credit
You may be able to take this credit for each of your children under age 17. The Child Tax Credit may be worth as much as $1,000 per qualifying child depending upon your income. If you can’t claim the full amount of the Child Tax Credit, you may be eligible for the Additional Child Tax Credit (ACTC). You can find out more by reading Publication 972, Child Tax Credit. Be aware, if you do claim the EITC or ACTC, the IRS must hold your refund until at least February 15. This new law, approved by Congress, requires the IRS to hold the entire refund — even the portion not associated with EITC or ACTC. This change helps ensure that you receive the refund you are owed by giving the agency more time to help detect and prevent fraud.
You may be able to claim a tax credit for certain costs you paid to adopt a child. For details, see Form 8839, Qualified Adoption Expenses.
You may be able to get credit for higher education costs. Education tax credits can help offset the costs of higher education by letting you claim qualifying education-related expenses. The American Opportunity Tax Credit and the Lifetime Learning Credit can be subtracted in full from your federal income tax, not just deducted from your taxable income. Check out Publication 970, Tax Benefits for Education, and Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), to learn more. For information about these credits and more, visit the IRS YouTube Channel.
Student Loan Interest
You may be able to deduct interest you paid on a qualified student loan. You can claim this benefit even if you do not itemize your deductions. For more information, see Publication 970.
Self-employed Health Insurance Deduction
You may be able to deduct premiums you paid during the year if you were self-employed and paid for health insurance. This may include the cost to cover your children under age 27, even if they are not your dependent. See Publication 535, Business Expenses, for details.
Please contact G Tax & Accounting Services to learn more about these programs and see which credits and deductions may apply in your specific situation by emailing email@example.com.