Top 3 Benefits of Having a Dependent on Your Taxes

October 19, 2018

Raising children comes with many rewards. Believe it or not, some of these advantages are financial. While taking care of your kids can be expensive, you can save money via tax credits and deductions. Encino Company Payroll Services can help you understand how to claim dependents on your taxes so you can boost your tax refund. Here are some ways your kids can benefit you by being tax-savers.

1. Child Tax Credit

With new tax laws in place, here are the details you need to know about the Child Tax Credit:

• The credit is bumped up from $1,000 to $2,000.
• The income threshold is now $400,000 if you’re married and filing jointly — it used to be only $110,000.
• You can claim the credit if you have a dependent child under 17 years old.

If you meet the requirements for the Child Tax Credit, you can significantly reduce your tax burden by the unnecessary qualifier. Los Angeles accounting services can help you learn more about eligibility.

2. Earned Income Tax Credit

If your income is below the threshold, you can earn more on your tax refund with this credit. Here is the income limit depending on how many children you have for the 2018-2019 tax year:

• One child: $40,320 ($46,010 if you’re married and filing jointly)
• Two children: $45,802 ($51,492 if you’re married and filing jointly)
• Three or more children: $49,194 ($54,884 if you’re married and filing jointly)
• The refund you can receive ranges from $519 to $6,431.

3. Child Care Credit

If you are employed or seeking employment and pay for childcare for a child under 13 years old, you can benefit from the Child Care Credit. You may get a credit of 20% to 35% for what you pay for after-school programs, nursery school, daycare, or private kindergarten.

Take advantage of these credits when you’re filing your taxes with the help of Encino Payroll.

 

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