If You Have Kids You May Qualify for These Four Tax Breaks
By H&R Block’s Leigh Mutert, CPA and hrblock.com Community Manager
These child tax credits and deductions can mean a tax refund for you!
There are many money-saving tax credits and deductions that can reduce the tax burden on families with children. The Child Tax Credit, Child Care Credit and the Earned Income Credit can all mean tax savings for families with one or more children. Remember, a tax credit is a dollar-for-dollar reduction of the taxes you owe.
Child Tax Credit
The maximum Child Tax Credit is $1,000 each qualifying child under 17. Because this is a partially refundable tax credit, even taxpayers who do not owe taxes are eligible if they have earned at least $3,000 in 2010. If you have four children, the credit can cut your tax bill up to $4,000.
Income Requirements: When income exceeds $110,000 (married filing jointly), $55,000 (married filing sep.) and $75,000 (all others) the child tax credit begins to phase out. If parents are divorced or separated, the parent who claims the child as a dependent is eligible to claim the child tax credit. This is true even if the parent’s filing status is married filing separately. The Child Tax Credit Table can help you determine if you are eligible for the full credit amount of $1,000.
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Wedded Bliss and Taxes: How You File Will Affect How Much You Owe
“Wedded Bliss and Taxes: How getting married and how you file (jointly or separately) affects how much you will owe in taxes” is a guest post offered by H&R Block’s Leigh Mutert, CPA and hrblock.com Community Manager.
She’s also given us FREE copies of H&R Block Federal Premium Edition! It’s tax season time and who wouldn’t want something premium for free 
We’re giving away FOUR copies. To enter – Comment, Like, & Tweet this article! The winners will be announced on Sunday, Feb. 20th.
How you file can mean tax savings in your pocket.
Marriage means compromise. It means negotiation. It means having to decide a million things as a couple: where to live, when to have kids, how to juggle the holidays between all the in-laws.
Your status on the last day of the year determines your filing status for the entire year. If you’re married, you and your spouse can choose to file a joint return or file separate returns. Unless you are required to file separately, you should figure your tax both ways (on a joint return and on separate returns) to determine which filing status is best for you.
Most taxpayers claim the standard deduction — a fixed amount that reduces the income on which you are taxed. Here are the standard deduction amounts according to filing status.
- Single or Married Filing Separately: $5,700
- Married Filing Jointly or Qualifying Widow(er): $11,400
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H&R Block Tax Software Giveaway
Working with the Yakezie group, H&R Block has generously offered FREE copies of their At Home Premium Federal program to our readers. If you’re self-employed or own rental property, then this is the edition for you! Not only do you receive live tax advice, but you also will get Schedule C and rental income guidance.
In case you’re wondering, that’s $49.95 value! They’ve even gone ahead and bumped up the certificate to $55 to cover sales tax as well. What nice guys huh?
Negotiating Your New Car Purchase
According to AAA, the Sticker Price (MSRP) is marked up by an average of 13.5% from what the dealer actually paid for the vehicle.
What scares us about car negotiations? Our preconceived notions of “not getting a good deal” or being subjected to “slimy dealer tactics”? Could it be how infrequently we make large purchases and the costs associated with them? With double-digit markups, it seems like new car buyers would be more more diligent in their research and more aggressive with their negotiations.
Mrs. FinEngr and I first started talking about the idea of a new car back in August of 2009. Not really entering the market until early September of 2010, we worked with Geoff, the Car Negotiation Coach, on strategies to secure the best possible price.
New Year’s Eve Day, we purchased a 2011 Hyundai Sonata.
Based on checked and re-checked calculations we negotiated:
- 19% below MSRP, over $3,000
- 14% below Factory Invoice, over $2,000
- 3.5% below Dealer Cost (averaged*)
*It’s hard for me to believe the dealer actually took a loss on our sale. At a minimum I know they got very little to no profit off us. Different sources and price profiles came back with savings from 0.5% to 6.0% under Dealer Cost.
As for the back story, here’s our situation…
Forget 2011, Go Back to 2010
A time to look forward, New Years gives us the opportunity to better ourselves. We set resolutions raising the bar where we’ve fallen short before. As we focus on our new goals, the old year is soon forgotten along with all that happened in the past.
Being a nut about advanced planning, we make a lot of headway financially in the month of January. Our portfolios are rebalanced, insurances are reviewed and updated, and our Roth IRAs are fully-funded (read why I’m a fan of “front-loading”) for 2011. Okay so what about the remaining 300+ days?
Being well-prepared not only keeps you ahead of the game, it also allows for more reflection. Knowing what you did well gives a strong sense of satisfaction and knowing what you did wrong helps you improve going forward.
Gift Card Arbitrage: New Way to Save More
Skimming through Jan-Feb issue of Money, one snippet caught my attention:
“Swap that Gift Card for Cash”.
The write-up focused on two sites – PlasticJungle and GiftCardRescue. Both are services for offloading unwanted gift cards. While the article seemed only to consider the selling opportunities I was amazed they didn’t bring up the BUYING potential of these sites. Sure gift cards are limited to specific stores, but these cards are being sold for less than what’s on them – that’s an immediate discount!
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