Children can reduce the amount of taxes you pay every year. There are many tax benefits for parents. When filing your federal tax returns, look out for these benefits:
Dependents: Children can be claimed as dependents in most cases. You are entitled to deduct $3,950 per dependent. If your income is above a certain amount this deduction will be less. Refer to Publication 501, Exemptions, Standard Deduction and Filing Information for more details.
Child Tax Credit: For each qualifying child under age 17, you can claim the Child Tax Credit of up to $1,000 per child. Chi If you happen to get less than the full credit, you might be entitled to Additional Child Tax Credit. See the Child Tax Credit Schedule 8812 and Publication 972 for more details.
Dependent and Child Care Credit: This credit can be claimed if you paid for care for one or more qualifying persons, such as dependent children under age 13. The care must have been paid for because you were working or looking for work. See Child and Dependent Care Expenses, Publication 503 for more on this credit.
Tax Credit for Earned Income: If you earned less than $52,427 last year, you might qualify for the Earned Income Credit. You can claim up to $6,143 in EITC. You are eligible with or without children. Have a look at the 2014 EITC Assistant tool at www.IRS.gov to see if you qualify.
Credit for Adoption: If you paid certain costs to adopt a child, you might be able to claim this tax credit. See Qualified Adoption Expenses in Form 8839 for more details.
Tax Credits for Education: These are designed to help with the cost of higher education. Two different credits are available. The Lifetime Learning Credit and The American Opportunity Tax Credit can help to reduce how much taxes you owe.
Should your taxed be reduced to zero or less after applying the credit, you might get a refund. You might still qualify if you don’t owe taxes. File for this credit using Education Credits on Form 8863. See Publication 970 Tax Benefits for Education or visit the Interactive Tax Assistant tool on IRS.gov to learn more and see if you qualify.
Use the Interactive Tax Assistant tool on IRS.gov to see if you can claim them. Visit the IRS’s Education Credits Web page to learn more. Also see Publication 970, Tax Benefits for Education, for more on this topic.
Interest for Student Loan: On a qualified student loan, you might be able to deduct the interest paid. Even if you don’t itemize your deductions, you can still claim this benefit. See Publication 970 for more information.
Deduction for Self-Employed Health Insurance: Were you self-employed and paid for your own health insurance? You might be eligible for premium deduction through the year. This will include any cost to cover dependent or non-dependent children less than 27 years of age. Have a look at Publication 535 Business Expenses for more info.
How TurboTax Can Help
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Turbo Tax covers more than 350 deductions and shows you which of them you qualify for. Be sure to check out their free tax refund estimator and if you ever have any tax related questions contact them at any time to have your questions answered by a tax expert.