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.
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.