Parents’ Day to
all the families in the eSmart Tax Community!
Knowing about credits and deductions for parents can help
you make smart
tax decisions for you and your family.
Child Tax Credit
provides up to $1,000 for every child under 17 in your care if you meet
couples filing joint
returns, the credit phases out if your adjusted gross income exceeds
phase-out starts at $75,000 for single
parents. If your filing status is Married Filing Separately, the
begins at $55,000.
may be able to take
the Earned Income Tax Credit if you have less than $3,300 in investment
and one of the following conditions apply:
or more children lived with you and you
earned less than $46,227 ($51,567 if married filing jointly),
children lived with you and you earned less
than $43,038 ($48,378 if married filing jointly), or
child lived with you and you earned less
than $37,870 ($43,210 if married filing jointly).
care can be a
costly expense.According to Child Care Aware
the annual cost for center-based care for an infant is higher than one
in-state college tuition at a four-year public college (in
a time where education costs are double than what the previous
the Child and
Dependent Care Credit provides some relief. If at least one parent
works, you can claim up
to $3,000 of the total cost of child care for one qualifying child. If
you have two or more
you may be able to claim up to $6,000 of costs.
your employer may
exclude up to $5,000 from your taxable wages for child-care expenses if
employer offers a Dependent Care Flexible Spending Account option.This
deduction may not be
added on top of the
child and dependent care credit, so you must decide which works best
tax credits are
mainly offered for post-secondary education, although some states may
relief for parents paying for parochial-school tuition and supplies for
children in kindergarten through high school.
The American Opportunity Credit was
recently extended through December 2017. It allows for a credit of up
for tuition and related expenses for each of the first four years
college at least half-time. Individuals who
earn no more than $80,000 and couples earning no
more than $160,000 are eligible for the full American Opportunity
you don’t claim the
American Opportunity Credit or a Tuition and Fees Deduction, the
Learning Credit may be the credit for you. It is a nonrefundable credit
(a tax credit that can't
reduce the amount of
tax owed to less than zero) of up to $2,000 per tax return.The limit on
applies to each tax return, rather than to each student.Though the
student requirement does
not apply, the course of study must be either part of a post-secondary
program or taken by the student to maintain or improve job skills.
features of the credit include:
and fees required for enrollment or
attendance qualify as do other fees required for the course. Additional
credit equals 20 percent of the amount spent
on eligible expenses across all students on the return. That means the
$2,000 credit is only available to a taxpayer who pays $10,000 or more
tuition and fees and has sufficient
limits are lower than under the American
opportunity tax credit. For 2012, the full credit can be claimed by
whose modified AGI is $62,000 or less. For married couples filing
ajoint return, the limit is
credit is phased out for taxpayers with incomes above these levels.
you don’t claim
either of the education tax credits, you still have the option to
deduct up to
$4,000 by taking the Tuition and Fees Deduction. The income limits for
tuition and fees deduction are $80,000 for single taxpayers and
married couples filing jointl
plan, or 529 plan, can help you save on taxes while providing for your
state-by-state 529 plans
authorized by the Internal Revenue Service allow you to invest and earn
interest on the funds without subjecting you to federal income taxes.
You must ensure that the
withdrawals are spent
on eligible education expenses, including tuition and room and board.
Otherwise, you’ll get hit
with income taxes
after the money is spent.
As a trusted
name in households everywhere, the
Liberty Tax Service
family is committed to ensuring that everyone receives the highest
professional tax preparation.We’re
equipping our customers with tax knowledge, tax planning advice, and
tips so that all customers have the opportunity to make smart decisions
why we continue to
share our tax knowledge through our social media networks and blogs.
Continue to connect with us
on the following
social media networks: