Tax Planning and Children

admin • Jun 19, 2019

Replacing Tax Breaks for Your Growing Children

Your kids are getting older. Before you know it they’ll be dating, driving and entering college (if they aren’t already!). Tax breaks drop dramatically as your children grow up, but you may be able to offset the losses with some timely tax planning. Consider the following tax events based on the age of your child:

  1. Age 13: No more dependent day care credit. The maximum annual credit for the cost of caring for your children while you and your spouse work, is generally $600 for one child and $1,200 for two or more children. But the credit is only available for children under age 13.

    Tax move: Now that your child is a teenager, hire him or her to work at your business. Typically, the child will owe little or no income tax on the wages, and might even be able to claim an exemption from withholding.
  2. Age 17: Child Tax Credit (CTC) no longer available. With the CTC you receive a $2,000 credit ($1,400 of which is refundable) for each child. Unfortunately, the credit disappears when the child reaches age 17. Remember, a tax credit is a dollar-for-dollar reduction of your taxes due, so as each child reaches 17, your taxes will go up by the full amount of the previously claimed credit.

    Tax move: Claim a nonrefundable $500 credit for a dependent who isn’t a qualifying child for the CTC. Typically, this is available to parents of high school seniors and college students
  3. Age 19 or 24: Goodbye qualifying child. At this age, your child is no longer eligible for the $500 dependent credit as a qualifying child, unless they are a full-time student. In that case, they stay eligible for another four years (until age 24). Once they cease to be a qualifying child, they may still be eligible for the credit as a qualified relative, but more restrictions (such as earned income) are in place.

    Tax move: If your child is going to college, claim one of the higher education credits for qualified college expenses. For instance, the maximum American Opportunity Tax Credit (AOTC) is $2,500 per student per year, although it is subject to a phaseout. Once they are out of school, call to discuss your situation. We can run through the dependency tests to determine if you can still take the $500 dependent credit.

Current Job Openings

By admin • 18 Oct, 2021
CPA or Candidate Job details Benefits & Perks Health insurance, Paid time off, Professional development assistance Job Type Full-time Qualifications… The post Current Job Openings appeared first on Omlin, Gunning & Associates, P.S..

September Newsletter

By admin • 24 Sep, 2021
How to Reduce Your Property Taxes Market values of homes are skyrocketing and higher property tax bills are soon to… The post September Newsletter appeared first on Omlin, Gunning & Associates, P.S..

Tax Deadlines

By admin • 12 Mar, 2021
What you need to know now! Deadlines for 2021 remain in tact for now. The IRS at this point has… The post Tax Deadlines appeared first on Omlin, Gunning & Associates, P.S..

October Newsletter

By admin • 01 Oct, 2020
This month: October 15  – Extension deadline for individual and C corporation tax returns October 31  – Halloween Does your… The post October Newsletter appeared first on Omlin, Gunning & Associates, P.S..

July Newsletter

By admin • 25 Jun, 2020
This month: July 4  – Independence Day July 15  – Individual income tax returns for 2019 are due  – C… The post July Newsletter appeared first on Omlin, Gunning & Associates, P.S..

June Newsletter

By admin • 28 May, 2020
This month: June 21  – Father’s Day This month’s newsletter details several reasons why you should look for other sources… The post June Newsletter appeared first on Omlin, Gunning & Associates, P.S..

May Newsletter

By admin • 15 May, 2020
This month: May 10  – Mother’s Day May 25  – Memorial Day COVID-19 uncertainty abounds for everyone. This month’s newsletter… The post May Newsletter appeared first on Omlin, Gunning & Associates, P.S..

April Newsletter

By admin • 08 Apr, 2020
This month: April 15 (Extended to July 15)  – Individual tax returns due  – C corporation tax returns due  –… The post April Newsletter appeared first on Omlin, Gunning & Associates, P.S..

Additional Paid Leave for Workers Affected by COVID-19

By admin • 31 Mar, 2020
What you need to know! The Families First Coronavirus Response Act is a new program that offers COVID-19 assistance for… The post Additional Paid Leave for Workers Affected by COVID-19 appeared first on Omlin, Gunning & Associates, P.S..

COVID-19 Bill Enhances Your Unemployment Benefits

By admin • 31 Mar, 2020
What you need to know! The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act provides individuals and businesses… The post COVID-19 Bill Enhances Your Unemployment Benefits appeared first on Omlin, Gunning & Associates, P.S..
More Posts
Share by: