Having children might qualify you to receive valuable tax benefits. We will list 8 of these benefits that parents should keep an eye out for when they file their federal taxes this year. Most people prefer to use Turbotax 2013 for filing their returns.
(1). Dependents – Most usually you will be able to claim a child as your dependent. This will apply even if the child involved was born at anytime in the year 2013. You can find additional details by referencing Publication 501, Standard Deduction & Filing Information, and Exemptions.
(2). Child Tax Credit – You could also be eligible to claim a ‘Child Tax Credit’ for every qualifying child who is under age 17 at the ending of the year 2013. The max credit is $1,000 for each child. If you receive less than a full amount of this credit, then you could be eligible for the ‘Additional Child Tax Credit. More information on both credits can be found in the instructions for Schedule 8812, Child Tax Credit, as well as Publication 972, Child Tax Credit.
(3). Child & Dependent Care Credit – You can claim this credit only if you paid somebody to care for at least one, or possible more, person or persons who qualify. Someone with 3 qualifying children, might receive as much as $6,044 as EITC at the time of filing and claiming it on their tax return. There is an EITC Assistant tool you can use at IRS.gov for help finding out if you actually qualify, or you can refer to Publication 596, the Earned Income Tax Credit.
(4). Earned Income Tax Credit – Anyone who worked and earned under $51,567 last year, might qualify for the EITC. If they have 3 qualifying children, then they could receive as much as $6,044 in EITC when they file and claim that on their tax return. They can use the EITC Assistant tool on IRS.gov to help find out if they qualify, or refer to Publication 596, the Earned Income Tax Credit for more info.
(5). Adoption Credit – You could be eligible for claiming a tax credit for specific expenses used for adopting a child. More details can be found in the instructions regarding Form 8839, the Qualified Adoption Expenses.
(6). Higher Education Credits – Anyone who paid for higher education themselves, or paid for higher education for an immediate family member, may qualify for one of two different education tax credits. The Lifetime Learning Credit as well as the American Opportunity Credit, both may lower how much tax you truly owe. With the American Opportunity Credit, if the credit is more than the tax owed, you may be eligible for a refund that can reach as high as $1,000. More info can be found in Publication 970, the Tax Benefits for Education.
(7). Student Loan Interest – You could be allowed to deduct interest paid on your qualified student loan, regardless of whether or not you itemize the deduction of your yearly tax return. Additional info can be found in Publication 970.
(8). Self-Employed Health Insurance Deductions – Anyone who was self-employed and paid for their own health insurance, could be allowed to deduct those premiums paid for covering their child in accordance with the Affordable Care Act. This applies to all children under the age of 27 at the year’s end, even if they were not your dependent. Refer to Notice 2010-38 for more info.
You can find publications and forms regarding these topics above on the IRS.gov website, or you can call 800-TAX-FORM/800-829-3676. We recommend using Turbo Tax 2013 for your tax return needs.