By Mary Schwager for GalTime.com
As you start to gather your documents and tally your receipts for your taxes, don't forget to write off your kids! There are many tax breaks you can claim with Uncle Sam if you have children and some you may not even know about.
For example, did you know that you can write off your child's summer day camp? Ann Marie Casinelli, senior manager at tax services company, ParenteBeard, says you can claim a credit for a percentage of your child care expenses that allow you to work. "Many people overlook the fact that summer day camp generally qualifies."
Get the math side of your brain thinking, Casinelli explains, "The credit can be up to $600 for one child or $1,200 for two or more children. People with higher incomes may not qualify for this credit. If you paid $3,000 for your son's day camp so he has somewhere to go while you're at work, you can receive a credit of $600 (3,000 x 20 percent). If your three children attend summer camp, and you spend $9,000 in camp expenses, the maximum credit you can receive is $1,200 ($6,000 x 20 percent). To qualify, children must be under 13 years of age. And, it's not just for daycare; it applies to any facility your son or daughter attends. This credit also relates to *any* after care expenses one would incur for their child so they are able to work."
What other ways can your kids help you get money back from the tax man? The IRS has these pointers:
• Dependents: In most cases, you can claim your child as a dependent. This applies even if your child was born anytime in 2013. For more details, see Publication 501, Exemptions, Standard Deduction and Filing Information.
• Child Tax Credit: You may be able to claim the Child Tax Credit for each of your qualifying children under the age of 17 at the end of 2013. The maximum credit is $1,000 per child. If you get less than the full amount of the credit, you may be eligible for the Additional Child Tax Credit. For more about both credits, see the instructions for Schedule 8812, Child Tax Credit, and Publication 972, Child Tax Credit.
• Child and Dependent Care Credit: You may be able to claim this credit if you paid someone to care for one or more qualifying persons. Your dependent child or children under age 13 are among those who are qualified. You must have paid for care so you could work or look for work. For more, see Publication 503, Child and Dependent Care Expenses.
• Earned Income Tax Credit: If you worked but earned less than $51,567 last year, you may qualify for EITC. If you have three qualifying children, you may get up to $6,044 as EITC when you file and claim it on your tax return. Use the EITC Assistant tool at IRS.gov> to find out if you qualify or see Publication 596, Earned Income Tax Credit.
• Adoption Credit: You may be able to claim a tax credit for certain expenses you paid to adopt a child. For details, see the instructions for Form 8839, Qualified Adoption Expenses.
• Higher education credits: If you paid for higher education for yourself or an immediate family member, you may qualify for either of two education tax credits. Both the American Opportunity Credit and the Lifetime Learning Credit may reduce the amount of tax you owe. If the American Opportunity Credit is more than the tax you owe, you could be eligible for a refund of up to $1,000. See Publication 970, Tax Benefits for Education.
• Student loan interest: You may be able to deduct interest you paid on a qualified student loan, even if you don't itemize deductions on your tax return. For more information, see Publication 970.
• Self-employed health insurance deduction: If you were self-employed and paid for health insurance, you may be able to deduct premiums you paid to cover your child under the Affordable Care Act. It applies to children under age 27 at the end of the year, even if not your dependent. See Notice 2010-38 for information.
Brand new for this filing season: Legally married same-sex couples can file as a married couple and take the tax benefits together. How do you get most back as a family? Turbo Tax recommends:
• If you're legally married on Dec. 31, you're considered married for the full year and must file as either married filing jointly or married filing separately. Couples who are married and filing jointly may benefit from lower tax rates on their combined income. Using the married filing separately status may make you ineligible for valuable tax deductions and credits related to your kids. If you're married you have to file as married filing jointly in order to take advantage of these deductions and credits.
• One of these valuable tax credits is the Earned Income Tax Credit, worth up to $6,044 for 2013. Your income and number of qualifying children will determine the actual amount of your Earned Income Tax Credit. The maximum credit you can qualify for is $6,044 with three or more qualifying children, $5,372 with two qualifying children, $3,250 with one qualifying child and $487 with no qualifying children depending on your income. The credit is phased out the closer your income gets to the maximum income limits.
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