With the tax season in full swing, you must be looking for ways to maximize your tax credits along with gaining hefty deductions. As a family person you work hard day in, day out to ensure that your family is well fed, your children receive the best education money can buy, and there’s a roof for them to sleep under. The IRS acknowledges your efforts with a number of tax credits aimed at simplifying the lives of everyday heroes providing for their families.
Here are three tax credits to help you save big on your tax filing this year:
Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is a refundable tax credit given to taxpayers that earn low to moderate income based on the following criteria:
- The individual must be a US Citizen
- He/She must be over 25 years of age or have qualifying children
- He/She shouldn’t file for “married filing” separately
- Income must be earned through employment – self or otherwise
You are considered to have a child qualifying as per the EITC if
- They are under 19 years of age, or under 24, if they are a student. There is no age limit for permanently disabled individuals
- Your “child” can be your son, daughter, or stepchild. A brother, sister, half-brother or sister, or stepsister/brother can also qualify as your “qualifying child” if they meet the rest of the conditions
- Your “qualifying child” must have lived with you in the USA for more than 6 months
- Your “qualifying child” must not have filed a joint return except when filing for tax refunds
This tax credit will not only earn you a deduction in the amount of tax you owe but also makes you eligible for refunds in case your credit is more than your tax liability.
EITC even allows you to file for missed tax refunds, for up to 3 prior years!
The deadline for filing your documents is April 15, 2019. However, the only way to actually be able to enjoy the benefits of EITC is to file your return on time.
Child Tax Credit
With Child Tax Credit, you could be eligible to earn up to $2000 for each qualifying child in 2018. To enjoy the benefits associated with this credit plan, your “qualifying child” needs to meet the following criteria:-
- He/She should be a US citizen
- He/She should be under the age of 17
- He/She should be dependent on your taxes
- He/She receives more than half of his/her financial support from you
- He/She should have lived with you for more than 6 months
Child and Dependent Care Credit
This one offers relief to people with young kids who have to pay for hired help. It is designed to help you recover 35% of the dependent costs of up to $3000 for one child and $6000 for two or more.
The hired help, however, cannot be someone that you claim as a ‘dependent’. Also, you need to be employed or actively looking for a job during the period you claim the tax credit for.
We hope this information comes in handy when you file your returns this year. For more tax tips and consultation services, drop in a mail at email@example.com or call us at (888)-482-0279.