In our society we have witnessed an unfortunate shift in family dynamics… In 1947 the average family consisted of 2 parents and 2 children. Now that statistic has shifted dramatically, with more families making do with half as many parents.
As this becomes so common, these parents have a much harder time having to be not just one parent, but both. If you are struggling with this situation yourself, rest assured that there are people who respect you and look up to you. I am one of those people and have considered several tax credits and deductions that could help make the difference and increase the value of your refund. Every little bit helps, and we at Online Tax Pros hope it helps you this tax season!
Education Tax Credits: These two credits cannot be claimed by one person, but they are good if you have a custody agreement that gives each parent one. The first is the Lifetime Learning Credit. This credit gives you a maximum of $2,000 towards tuition and up to $4,000 for students in Midwest disaster areas. You can claim this credit each year that your child is enrolled in undergraduate and graduate college programs.
Next, the Hope Credit is only for the first two years of college or technical education. This credit has a value of $1,800 per student for parents or college enrolled dependents, and the value increases to $3,600 if you are in the disaster areas of the Midwest, like the Lifetime Learning Credit.
Adoption Credit: You may be able to claim a tax credit for qualifying expenses paid to adopt an eligible child. If you use the adoption loan, you must file a paper tax return with the necessary adoption documentation.
Child Tax Credit: This $1,000 tax credit is available for each child in most single parent cases. However, if the household income is more than $75,000 and the enrollment status is single, eligible widow(er) or head of household, the loan will lose value. Only the parents with sole custody can take advantage of this credit, but where there is a joint custody arrangement, it is up to the parents to choose how they can either alternate or let one parent each year.
Child Care Credit: It’s hard to take care of your kids all the time. The Internal Revenue Service knows this and has issued a loan that allows you to help out and not have to “take your kid to work” every day. When registering, you must provide the name and tax identification number of the childcare worker. With this credit, you can claim $3,000 for one child and up to $6,000 for two or more children. This will be completed on IRS Form 2441 and attached to your 1040 tax return.
Earned Income Tax Credit: This credit was created to help families in lower income brackets. You’re almost guaranteed a refund if your tax owed is less than your earned income tax credit.
According to irs.gov, the figures for 2012 are as follows:
Earned Income and Adjusted Gross Income (AGI) must each be less than:
$45,060 ($50,270 if spouses file together) with three or more eligible children
$41,952 ($47,162 married if filed jointly) with two eligible children
$36,920 ($42,130 married if filed jointly) with one qualifying child
$13,980 ($19,190 if spouses file together) with no qualifying children
Fiscal year 2012 maximum credit:
$5,891 with three or more eligible children
$5,236 with two eligible children
$3,169 with an eligible child
$475 without eligible children
Investment income must be US$3,200 or less for the year.
Claiming College Students as Dependents: If your children go to college, you can still claim your child as a dependent as long as they are enrolled full-time. However, remember that if your children are both working and studying at a university, they cannot claim an exemption for themselves if you have already claimed them with that deduction.
Hopefully these credits and deductions will bring you a big refund. In these hectic times, Online Tax Pros make it easy for you to file an e-file and get your taxes done online from the comfort of your own home. This way you can have your refund sent directly to your bank account at your disposal. You definitely deserve it for all the hard work you put in to take care of your kids.
Thanks to Greg T Holbert | #Taxdeductible #credits #deductions #single #parents