The Scoop on the Child Care Tax Credit How You Can Improve Your Credit Score Here ph
Child care tax credit is a blessing for parents of children under the age of seventeen. The child care tax credit provides a tax credit to taxpayers. This tax credit is available to help offset the cost of daycare and other childcare costs. If you are interested in taking the child care tax credit, you need to know the limitations, how to file for the tax, and income limitations for the child care tax credit. Who is Eligible for the Child Tax Credit? Parents of children under the age of 17 at the end of the tax year that do not provide more than half their own care are eligible. The children have to live with you over half of the year and have to be a US citizen or resident alien in order to qualify for the Child Tax Credit. What is the Child Tax Credit?
The Child Tax Credit is a credit that reduces the overall tax bill of a tax payer. A credit is actually much better than a deduction because it reduces your tax liability dollar-by-dollar. A tax deduction reduces the amount of taxable income you have. A refundable credit is better than a non-refundable credit. If your tax liability is less than the credit, the IRS will send you the unused portion if the credit is a refundable credit. If you don’t use it you lose it with regular tax credits. The child tax credit is not refundable. However, there is an an additional child tax credit available to those that do not get the full child tax credit. The additional child tax credit is refundable, meaning you can receive it even if your tax liability is zero. What are the Income Limitations? As with many tax credits, the Child Tax Credit is reduced for those that enjoy higher income levels. The child tax credit is phased out between AGI (Adjusted Gross Income) of $55,000 and $110,000 depending on your filing status. Of course, these limitations are based on the 2008 tax year, and the income limits could be higher or lower depending on changes in tax law. Consult the 2009 version of Publication 972 once its available for more specific limits and credit information. How do I File for the Child Tax Credit? If you wish to take the child tax credit you cannot file a 1040-EZ. When you file 1040, 1040A, or
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1040NR be sure to fill out form 8812 to receive the credit. The child tax credit calculations and limitations change from year to year. Comprehensive advice on the maximum credit available is updated in a timely manner on the IRS website. Claiming the child tax credit can help reduce the cost of childcare. You can use this credit to pre-pay daycare expenses or even put it away in a college fund for your kids. What are you going to do with this information right now? Tell me and I'll send you a free gift.
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Do's and Dont's of the Credit Card Game Here pf Futhermore: The Scoop on the Child Care Tax Credit
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