Ten Tax Topics for Taxpayers with Tots and Teens

Got Kids? They may have an impact on your tax situation. Listed below
are the top 10 things the IRS wants you to consider if you have children.

Dependents In most cases, a child can be claimed as a dependent in the year
they were born. IRS Pub 501

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. PUB 972
Child and Dependent Care Credit You may be able to claim the credit if
you pay someone to care for your child under age 13 so that you can work,
look for work OR attend school. We will need the Name, Address, and
Social Security or EIN Number for the Care Giver. PUB 503
Earned Income 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.
EITC has once again been increased this year. PUB 596
Adoption Credit You may be able to take a tax credit for qualifying
expenses paid to adopt an eligible child. FORM 8839
Children with Earned Income If your child has income earned from
working they may be required to file a tax return. PUB 501
Children with Investment Income Under certain circumstances a
child’s investment income may be taxed at the parent’s tax rate.
PUB 929
Coverdell Education Savings Account This savings account is used
to pay qualified educational expenses at an eligible educational
institution. Contributions are not deductible, however, qualified
distributions generally are tax-free. PUB 970
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. . PUB 970
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. PUB 970

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