When you are a busy parent, time flies!
If you can find time to check some tax advice, the money saved can be well worth your time
Take a look at these tax tips especially for childrearing years.
Check Social Security number for your child
children can mean substantial tax breaks, but only if they have social security numbers.
before, you could wait until children are older before obtaining the Social Security numbers for them.
In fact, many people do not get the numbers until they are old enough to start working.
now, you can not take a dependency exemption for your child, unless you have a valid Social Security number before filing.
The only exception to this is if the child was born and died in the same year.
Double-check your child's number after entering your tax return, and make sure that the child's name is spelled exactly as his Social Security card.
IRS cross-check this information and any deviation may delay the processing of your return until you correct the information.
do not assume that your filing status is single because you are single
If you are single, but you maintain a home for a child, you may qualify for a filing status more favorable than simple tax.
If your spouse died during the tax year, you can always file filing as married together for this year.
If your spouse died in one of the two preceding taxation years, and you maintain a home for a qualifying child or spouse, you may be eligible to file as a qualifying Widow (er) With a dependent child.
For example, if your spouse died in 2012, you can file a joint return for 2012 taxes.
you can be able to deposit a qualifying widow (er) for 2013 and 2014 if you meet the qualifications.
best filing status if you are single and have a child living with you can be head of household.
To file as head of household, you must pay more than half the cost of maintaining a home for the year, be unmarried or considered unmarried on the last day of the year, and have a "qualifying person" - as your child -. living with you for more than half of the year
you'll usually pay less tax by using the qualifying widow (er) with a dependent child or the Head of deposit of state households than you would by filing as single.
Consider starting a retirement fund for your child
Starting a pension fund for a child is not as crazy an idea as it may appear.
The most important factor in an investment plan is the time, and your child never more than that if he or she begins to invest now.
You can open a traditional individual retirement arrangement (IRA) for your child.
When your child begins to earn income, the child can make contributions and to reduce its taxable income.
Another option is to open a Roth IRA for a child. He or she will not be able to deduct contributions now, but any withdrawals after retirement will be tax free.
If the retirement your child seems too far away to worry about, consider that IRA can be used for more than just a salary in old age.
for example, your child may be eligible to withdraw IRA funds without penalty for higher education expenses, medical insurance in case of unemployment, and up to $ 10,000 for home first time purchase.
Up plan which takes a dependency exemption for each child
It is not always easy to determine who gets to take the dependency exemption for a child, especially if the child spends time at home more of a parent and receives support from both.
According to the IRS, if you live with the child for more than half of the year, you can take the dependency exemption for the year.
you can give up the right to take the dependence to the other parent if you choose. This may be a good idea if the other parent is in a higher tax bracket.
Do not miss the Earned Income Tax Credit if you may qualify
The Earned Income Tax Credit (EITC or EIC) may pay you a substantial amount of money - up to $ 6,143 2014.
However, some people lack the credit for one of two reasons
is they think the tax on earned income. the credit is for taxpayers with very low incomes, or they think wrongly that they can not ask a child for credit purposes if their former spouse claims the dependency exemption.
income limits for the EITC increased in recent years, particularly for those with more children.
for 2014, taxpayers with three or more children qualify can earn up to $ 46,997 ($ 52,427 if filing jointly) before the credit is completely eliminated.
your adjusted gross income (AGI) must be less than the limit of income earned.
the amount of your EITC, and the income levels in which the EITC is phased out, are significantly affected if you have one, two, or three or more children.
Make sure you claim all children, you should. You may be able to claim a child for EITC, even if the other parent takes the child dependency exemption.
Only the parent with whom the child lives can claim the child for EITC. There is no support for this credit test.
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