Three Tax Credits for Your Family

Tax Deductions and Credits Young Happy Family Of Three Enjoying Each Other Outside On Sunny

The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018 deadline. Some tax information below will change next year under the new tax law effective on your 2018 taxes, but won’t impact the one you are filing this year. Learn more about tax reform here.

Tax season is in full swing and we want to make sure you keep your hard earned money by taking advantage of all of the tax deductions and credits you deserve. Our guest blogger, Joan Ferreira of blogfinanzas.net, is here to share tax credits you don’t want to miss.

This post can be found en Español here.

As parents, we work hard to provide our children with the best education, a roof to sleep under and food to eat every day. This valiant effort is not overlooked by the Internal Revenue Service (IRS). Here are three tax credits that are available when you prepare your tax return, which will help you financially support your home and children.

1. Earned Income Tax Credit (EITC)

The Earned Income Tax Credit is one of the most helpful for families, communities, and taxpayers. If you worked and had an annual income of less than $48,340 single and $53,930 married filing jointly, you may be eligible for a credit of up to $6,318 if you have 3 or more kids.

According to the IRS, more than 25 million filers received the EITC last year, and the average EITC was about $2,400. However, millions of taxpayers are still missing out on this valuable tax credit, and the IRS reports that one out of five qualifying filers fails to claim the tax credit. When you use TurboTax you are asked simple questions about you and TurboTax will help you figure out if you are eligible for this and other tax credits based on your answers.

2.  Child and Dependent Care Credit

The Child and Dependent Care Credit is another credit you can claim for the expenses associated with the care of your little ones. If you have children under age of 13 and you pay someone else to take care of them, you could qualify. This credit is designed to help recover up to 35% of dependent care costs up to $3,000 for one child ($1,050 credit) and $6,000 for two or more ($2,100 credit).

Similar to the Earned Income Tax Credit, one of the requirements to claim this credit is that you were working or were looking for work. The person who takes care of your children cannot be someone that you claim as a dependent (for example, an older child or your dependent parents). TurboTax will take care of asking you the necessary questions as you prepare your tax return, to ensure you receive the credit amount that you deserve based on your answers.

3.  Child Tax Credit

With the Child Tax Credit you could receive up to $1,000 for each qualifying child in 2017. There are some requirements that you need to meet, such as their age, your relationship to the child, financial support, and his or her immigration status.

The child must be under the age of 17 and a dependent on your taxes, receive more than half of his or her financial support from you and have lived with you for more than half the year. The child must also be a citizen or resident of the United States. The credit is gradually decreased if you have a modified adjusted gross income of more than $75,000 (or $110,000, if married and filing jointly).

These three credits will help to reduce the taxes you owe or even grant you a tax refund, which could be allocated towards your children’s education or to start your family’s financial plan. Whatever your financial goal may be, you can count on TurboTax to help you get the credits and deductions that you deserve based on your answers.

If you have questions, you can connect live via one-way video to a TurboTax Live CPA or Enrolled Agent to get your tax questions answered. The TurboTax Live CPA or Enrolled Agent can even review, sign, and file your tax return.

Comments (21) Leave your comment

  1. Hi, I think your blog might be having browser compatibility issues.
    When I look at your blog site in Firefox, it looks fine but when opening in Internet Explorer, it has some overlapping.
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  2. I am so disappointed and feel I was cheated by turbo tax. We have used the software for several years and have always been satisfied with the results. I would have said the same thing about this year except for all the add on charges. Not only did we pay the $49 for the deluxe version, but then got added on charges for another $50. Today we received a paper check in the mail, with a letter from a bank saying they deducted an additional $20 since our routing number was incorrect. We gave them the routing number our credit union gave us to use. So it cost us $120 for a simple tax return. Next year we’ll go to H&R Block and let them earn the fees.

  3. I have my 3 1/2 yr old granddaughter whom has lived with me since 6 months old. Never recieved any type of support monetary nor items needed for everyday living ex. clothes food pampers etc. Now hes claimed her all 4 yrs of which the 1st one yes but now the past 2 and now this year he I know is not intitled to but still claims and keeps every penny. Now I know we are and allowed to claim her being her sole provider what do we do here being that he files right away. I know we can file back 3 yrs. but he believes he can not get auditted nor in trouble for fraud. Hes only seen her maybe even a handful of times this year. what rights do I have and what penalties will he be approached with? Thank you.

    1. Hi Vickie,

      Thank you for your visit, you may be able to claim your granddaughter as a dependent since she lived with you for the entire year and you provided for more than half of her support. If the IRS challenges dependency, he may end up getting the dependency or child related tax credits disallowed; this means that he will have to pay the money back plus interest and potential penalties.

      Thank you,

      Joan Ferreira

  4. I refinanced (VA) on my main home. On my original loan I had points stretched out on a 30 year plan. Turbo Tax gave me the current deduction. But now I’m unsure on how to correctly file on my refinance. What are the basics on filing a refinanced home loan? I file my own taxes and filing correctly is very important to me. I plan to call my bank and ask them the same question. But I’d really like to hear from a tax expert.

    1. Hi Lauren,

      If you provided for more than half of his living expenses you may qualify to treat him as a dependent. You may also qualify for other credits. Please use TurboTax tool to assist you in figuring out if you can claim him as a dependent.

      Thank you for your visit,

      Joan Ferreira

    1. Hi Sarah,

      Thank you for your comment, please log in to your TurboTax account to verify your status. You may also choose to go to the IRS website and choose the “Where is my refund?” tool.

      Thank you

      Joan

  5. I did my taxes last night and in regards to Educational Credit it stated used four years of credit already – when I had used four years. This was calculated by TurboTax. Hope can I correct since I did file last night? IRS information states can use credit for 2009, 2010, 2011, and 2012. Thanks.

  6. Our Daughter is 19 and a full time student and lives in a dorm during each semester but lives at home during the summer and most weekends and holidays.
    she does not work and is 100% financialy dependent on us.
    There are no other parents…
    since she lives out of the home more than half of the time can she be claimed as a dependent?

    1. Hi Art,

      Thank you for your comment, you generally are able to claim your children to whom you provide more that 50% of their living expenses and that lived with you for more than half a year. One of the exceptions for this rule is children living in school; they will still be considered as living at home. Therefore the short answer is that you may be able to do so. TurboTax will help you walk trough all these steps to verify your eligibility to claim your daughter. Best of luck with her in school,

      Thanks

      Joan Ferreira

    1. tracit281… You can claim the expenses associated with your truck if it is used in your business. You cannot claim expenses if it’s just for commuting to your job or for other personal uses.

      To claim vehicle expenses, report them on the forms for business income. Easiest way to find the right place is to put “car expenses” in the search bar in TurboTax. Good luck!

      Bob Meighan, VP TurboTax

    1. Hi Carmen. It’s been quite a while since I’ve filed thru TurboTax.

      You stated it was free thru the IRS website, if you qualify.

      What does this mean? How / Why wouldn’t one qualify for the free version?

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