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Tax tips for parents and guardians

February 5, 2016
Drawing of a family in a magic carpet. Link to Navigating Life's Journey

Here’s a great idea …

Raising kids can be expensive.  Thankfully, they also come with some tax breaks.  Keep more money in your pocket at tax time by applying for all qualifying credits and deductions.

In other words …

Tax exemptions lower the total amount of your taxable income.  The lower your income, the less you pay in taxes.  Tax credits are applied toward the amount of tax you owe.  Some tax credits are “refundable”.  If you owe less than the amount of the credit, the balance is refunded to you.  Parents and guardians can save money at tax time by using the appropriate deductions and credits.

How this applies to you…

In 2015, you can claim a $4,000 exemption for each qualifying child, which may include your child or stepchild, foster child, sibling or step-sibling, or descendants of any of these, such as your grandchild. To qualify, the child must live with you more than half of the year and be under 19 at the end of the year or under 24 and a full-time student. Some families may also qualify for a non-refundable tax credit of up to $1,000 per child.

 

You may be able to claim the child and dependent care credit if you paid expenses for the care of a qualifying individual to enable you (and your spouse, if filing a joint return) to work or actively look for work.

Do you have a college student?  Deduct up to $4,000 of eligible tuition and fees paid for your dependent’s higher education costs. You may also be eligible to take one of the education credits instead of a tuition and fees deduction. Choose the one that will give you the lower tax.

To find out more …

Find more information about tax credits and deductions at www.irs.gov.

The Cooperative Extension Service is your source for reliable, research-based information to improve quality of life. Discover the latest recommendations for creating a spending plan, managing credit, building your savings and investing for the future.

 

Learn more at www.uaex.edu.

Laura Hendrix       

navigatinglife@uaex.edu

 

 

 

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