Tax credits for families

There is a whole checklist of tax credits on hand for households with kids and dependents. Miguel Burgos, CPA and TurboTax expert, lays out loads of to withhold in mind. Look the video above or read the transcript beneath.

Video transcript:

Tracy Byrnes: Correctly, if you may have a family, and also you may have a bunch of kids, they may be big anguish in the necks, but you earn some credit ranking abet for them reach tax time. Fortunately, Uncle Sam understands. CPA and TurboTax expert Miguel Burgos is here with us ethical now to chat about this. OK, so I received kids. We have gotten households. What are some credits that households should take benefit of?

Miguel Burgos: Correctly, Tracy, in the tax code, we have many credits that we can affirm are family-oriented. As an example, we have the kid tax credit ranking that can bound up to $2,000. And for 2024, up to $1,700 of these are refundable.

Furthermore, we have the Child and Dependent Care Credit. Whenever you happen to can have a single dependent, and also you are paying for child care when you work or depend on, you may earn a credit ranking of up to $1,050. And if you may have two or more dependents, you may earn a credit ranking of up to $2,100. Further to that, we have the earned profits credit ranking for 2024. The utmost amount is $7,830.

And moreover the educational credits. If one of your kids is attending university or college, you may divulge the American different credit ranking, which matches up to $2,500, and moreover the lifetime studying credit ranking. So many issues, take into accout, you may bound to TurboTax.com to appear what's the acceptable possibility and which of these credit ranking you qualify for, and earn a profit out of them.

Tracy Byrnes: Yeah, it is good stuff. I imply, there are AGI limitations on these form of credits, but please, please, please try and look if you qualify. And, of route, be definite you may have your kids' social security numbers on hand for all of this. So some of the issues, Miguel, that I deem households in particular fight with in most cases is married submitting joint versus married submitting individually. Is there ever a decent time to enact married submitting individually? I undoubtedly feel admire it is most frequently more precious to file jointly.

Miguel Burgos: And I have confidence you on that, Tracy, most frequently, most instances. If it is accurate in regards to the tax final consequence, getting a rate of refund, married submitting jointly is the acceptable possibility. And loads of reasons for that. Tax brackets are wider, so which methodology that more profits is taxed at a lower rate. Further to that, there are loads of credits that are no longer on hand if you file individually. As an example, the earned profits credit ranking, the kid self sustaining child and dependent care credit ranking — and moreover, that you just may as well be tormented by quite a lot of limitations.

That you may must look how you are going to establish the customary deduction if one of them desires to itemize, the quite a lot of one desires to divulge the customary deduction. Nonetheless, if you may have factual reasons — as an instance, as an illustration, that a couple that has some form of prenup affiliation, or, possibly either taxpayer or partner owes cash that the IRS will buy through their refund. Then in bid to offer protection to the refund of the quite a lot of a part of the tax return, either the taxpayer's or the partner, you may must file individually accurate to offer protection to your refund and withhold a ways off from the responsibility of no subject the quite a lot of occasion may owe.

However take into accout, for the most part, submitting jointly provides the upper tax final consequence. Whenever you happen to'd admire to figure it out, bound to turbotax.com. And we have experts that can allow you to establish which one is most precious for you, either submitting jointly or submitting individually.

Tracy Byrnes: Yeah, in definite instances, it is value working it both ways. So completely take benefit of the products on the market. CPA and TurboTax expert Miguel Burgos, thanks for sharing all this data with us.

Miguel Burgos: Correctly, it is my pleasure.

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Editor's Bid: The bid changed into once reviewed for tax accuracy by a TurboTax CPA expert for the 2024 tax year.