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?
Top 10 Ways to Avoid an IRS Audit
Contrary to popular belief, it is possible to drastically decrease your chances of suffering an IRS audit through several proactive measures. While not fool-proof, simply considering taking these steps will go a long way to helping you avoid the headaches that an IRS audit can bring. Being aware of the IRS audit process – as well as common red flags – will position you much better to avoiding an audit.
Here are several tips to help you avoid an IRS audit:
- Be truthful 100 percent of the time: Many people still do not realize that the IRS has a complex computer system meant to catch lies and mistakes on tax returns. If you are not being truthful, there is a much better chance that your return will be audited. Continue reading “Top 10 Ways to Avoid an IRS Audit” »
What to Do If You Owe Taxes to the IRS
IRS Payment Plan versus Borrowing Money
If you owe taxes to the IRS it is important to remember that you are not alone and that each year thousands of people are left in debt after finishing their tax return. Regardless of the severity of your current financial situation you have several viable choices, most notably the following:
- Pay taxes using a credit card
- Request an IRS Payment Plan
- Receive a loan from an outside financial institution or contact (e.g. bank or family member)
Convenience Tax: You’re Only Charging Yourself
Often people lump debt into one of two categories – “good” debt and “bad” debt.
Typically good debts refer to student loans, business loans, and anything resulting in your general betterment. Bad debt includes all of life’s temporary luxuries.
There’s another side of debt many people don’t often consider. Not a separate group, it’s more a subcategory to both good and bad debt .
What I’ll call the “Convenience Tax” refers to our preference towards making things easier. Not completely unwarranted, with the technologies available this day in age, why would you go out of your way to make yourself uncomfortable?
Because these conveniences are adding
unnecessary debt to your balance sheets.
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