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Top 8 Ways Children
Lower Your Taxes
  Dependents:
In most cases, a child can be claimed as a dependent in the
year they were born. Be sure to let us know if your family
increased this year and we'll take a look at whether you can
claim the child as a dependent this year.
 Child
Tax Credit: You may be able to take this credit on your
tax return for each of your children under age 17. If you do
not benefit from the full amount of the Child Tax Credit, you
may be eligible for the Additional Child Tax Credit. The
Additional Child Tax Credit is a refundable credit and may
give you a refund even if you do not owe any tax.
 Child
and Dependent Care Credit: You may be able to claim this
credit if you pay someone to care for your child under age 13
so that you can work or look for work. Be sure to keep track
of your child care expenses so we can claim this credit
accurately.
 Earned
Income Tax Credit: The EITC is a benefit for certain
people who work and have earned income from wages,
self-employment, or farming. EITC reduces the amount of tax
you owe and may also give you a refund..
 Adoption
Credit: You may be able to take a tax credit for
qualifying expenses paid to adopt a child.
 Coverdell
Education Savings Account: This savings account is used to
pay qualified expenses at an eligible educational institution.
Contributions are not deductible; however, qualified
distributions generally are tax-free.
 Higher
Education Credits: Education tax credits can help offset
the costs of education. The American Opportunity and the
Lifetime Learning Credit are education credits that reduce
your federal income tax dollar for dollar, unlike a deduction,
which reduces your taxable income.
 Student
Loan Interest: You may be able to deduct interest you pay
on a qualified student loan. The deduction is claimed as an
adjustment to income so you do not need to itemize your
deductions.
To read more articles on our web
site
click here or go to
www.eSullivan.net and click on the Newsletter section.
As always you can call our offices if you have any
questions about these or any other accounting related issues, at 301-657-8080.
Regards, Paul Sullivan, CPA |
