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Child Care Tax Credits - Understanding The Maze!

Did you know you can get multiple tax breaks for having a child? Child care is just one of many tax credits you qualify for when you are the parent of a minor. You should think about child care tax credits all throughout the year, not just at tax time. You could save a bundle on your taxes because of child care taxes. Many parents forget about their tax rights and these items go unclaimed.

The first child care credit you should claim is the child tax credit. Just about everyone qualifies for this tax credit. If the income you have after adjustments is over $75,000 for a single filer or $110,000 for a married couple, you will not qualify for this credit. This is a one thousand dollar credit that you will receive for each child you are responsible for. This does not just apply to your immediate children. If you are the caregiver for a grandchild, step child, or even an adopted child, you could qualify for the child tax credit. To determine whether or not you qualify, first, consider if the child is your dependent. Then, consider whether or not you provide over half of their child car expenses, including food, clothing and other expenses. Finally, if the child will be sixteen at the end of the tax year and no one else claims the child on their taxes, you qualify for the one thousand dollar credit.

Next, consider the depended and child care tax credit. This is a credit for any money you paid for child care of one of your dependents to give you the ability to work. Claiming this money against your income reduces your federal income, which will qualify you for more returns of your taxes. This applies to any child under the age of thirteen. They, of course, have to be your dependent. You will receive a credit based on a percentage of the overall cost of the child care you are claiming. If your employer gives you a benefit to cover the cost of child care, this will be subtracted from the amount of your total cost for child care that you claim on your tax return.

The final tax credit not all taxpayers will qualify for. It is only for those who are in the lower income brackets. This is the Earned Income Tax Credit. This is a credit that is best calculated by your tax professional, because the upper income limit varies from year to year and sometimes with enough deductions, you will qualify even if you do not think that you will. This is a large credit and is designed to help improve the standard of living for those in the lower income tax brackets.

Taking advantage of the three major credits you can receive for your dependents makes your income tax return much more exciting. Be sure to talk to your tax preparation professional about the tax credits you qualify for. Children are expensive and you might as well get the credits that are deserved you!

Michael Russell Your Independent guide to Child Care

Source: www.articlesbase.com