- Rethinking Your Benefit Elections
- Disability and Life Insurance
- To Work or Not to Work
- Looking At Day Care
- Employing a Nanny
- Tax Advantages Associated with Children and Families
- Children's Taxes, Tax Returns, and the Kiddie Tax
- College Funding–There's No Time Like the Present
- Estate Planning and Children
- Other Tax Credits
Child Tax Credit
Parents may claim a $1,000 credit against federal income tax for each child under age 17. The credit is phased out starting from $110,000 of adjusted gross income for married joint filers and ($75,000 for single filers).
The child credit is partly refundable; the refundable portion is referred to as the "additional child tax credit." You receive a refundable credit if your Child Tax Credit is greater than the total amount of income taxes you owe, as long as you had an earned income of at least $3,000.
Earned Income Tax Credit
A credit is available to certain low-income taxpayers who have earned income. The maximum credit in 2014 is up to $496 ($487 in 2013) for a taxpayer with no children and who has earned income less than $14,590 ($14,340 in 2013), and $3,305 ($3,250 in 2013) for a taxpayer with one child and earned income less than $38,511 ($37,870 in 2013). For a taxpayer with two children and earned income less than $43,756 ($43,038 in 2013), the maximum 2014 credit is $5,460 (5,372 in 2013). For 3 or more children, higher limits apply.
Child and Dependent Care Tax Credit
A credit is allowed for a portion of qualified child or dependant care expenses that are paid in order for the taxpayer to work. The maximum amount of child care expenses that can be considered is $3,000 for one child or dependant, or $6,000 for two or more. The credit is 35% of eligible child care expenses with income of less than $15,000, gradually reduced to 20% of qualifying expenses for income exceeding $43,000.
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