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The IRS Presents 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. For more information see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information.
- 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. For more information see IRS Publication 972, Child Tax Credit.
- 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 or look for work. For more information see IRS Publication 503, Child and Dependent Care Expenses.
- Earned Income Tax 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. For more information see IRS Publication 596, Earned Income Credit.
- Adoption Credit You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child. For more information see the instructions for IRS Form 8839, Qualified Adoption Expenses.
- Children with Earned Income If your child has income earned from working they may be required to file a tax return. For more information see IRS Publication 501.
- Children with Investment Income Under certain circumstances a child’s investment income may be taxed at the parent’s tax rate. For more information see IRS Publication 929, Tax Rules for Children and Dependents.
- 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. For more information see IRS Publication 970, Tax Benefits for Education.
- 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. For more information see IRS Publication 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. For more information see IRS Publication 970.
The forms and publications on these topics can be found on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
The IRS Presents Three Reasons to Prepare and File Your Taxes Electronically(plus some Stacie Says)
[Stacie says: I have to say that I Loooove electronic filing. From a preparer standpoint, it has its advantages. A major advantage for me is that my office, when possible, is paperless. All my client files are electronic..and yes I have all kinds of backup…whenever possible I send my clients their tax returns paperless-ly and I love being able to hit a button and know that the return is instantly signed and out the door – No processing, sorting, mailing, yuk – no worrying about clients who travel or who are not around to sign and mail a paper return.
And how great is it to file extensions electronically? I mean fill out a form hit a button and receive confirmation that it is complete and accepted and on time. How great is that!. Plus electronic paperless filing allows me to work from anywhere. My electronic files are easily accessed (with my set up) from anywhere in the world (as long as I have internet access). And since I don’t need to print, I can work on the beach, in the mountains, follow my husband on his business trips, whatever… and my office is right at my fingertips.
Did I say I Looooove electronic filing!]
Last year, 2 out of 3 tax returns were filed electronically. Was yours? If not, here are three important reasons to e-file your return.
- It’s fast Your tax return will get processed more quickly if you use e-file. If there is an error on your return, it will typically be identified and can be corrected right away. If you file electronically and choose to have your tax refund deposited directly into your bank account, you will have your money in as few as 10 days.
- It’s safe The IRS is fully committed to protecting your tax information and e-filed returns are protected by the latest technology. In 20 years, nearly 800 million e-filed returns have been processed safely and securely by the IRS.
- It’s time Don’t miss out on the benefits of e-file, 2 out of 3 taxpayers, 95 million, already get the benefits of e-file.
E-file software reduces the chance of making errors when you prepare your return. However, some people still print the computer generated return and mail it to the IRS instead of hitting the “Send” button. By mailing the return, taxpayers miss out on some important benefits of IRS e-file.
- With e-file, you get the peace of mind that comes with the electronic receipt you’ll receive notifying you that the IRS received your tax return.
- Virtually everyone can prepare a return and file it for free. For the second year, the IRS and its partners are offering the option of Free File Fillable Forms. Another option is Traditional Free File. About 98 million taxpayers – 70% of all taxpayers – are eligible for the IRS Traditional Free File. Traditional Free File is a service offered by software companies and the IRS in partnership to provide free tax preparation software and free filing.
- E-file is available 24 hours a day, seven days a week, from the convenience of your own home.
- If you owe money to the IRS, e-file also allows you to file your tax return early and delay payment up until the due date.
- In 37 states and the District of Columbia, you can simultaneously e-file your federal and state tax returns.
Find out more about E-file at IRS.gov.