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10 Benefits Families Should Know About Before Filing Their Taxes

Photo Credit: Dinostock

We came into the New Year with a dark cloud looming over our heads, as many middle class families faced a tax increase of nearly $2000 – $3500.  The fiscal cliff threatened to send our nation back into recession.

But on January 1st, the White House proudly announced the  American Taxpayer Relief Act of 2012 was finally passed which means:

” middle-class families won’t see an increase in their income tax rates. We’ve avoided the fiscal cliff.”

And with the passing of the American Taxpayer Relief Act of 2012,  a group of tax cuts that will help middle class families keep more money in their pockets were extended.  So before you file your taxes, please make sure you are aware of the tax breaks that you are eligible for.

Lynnette  Khalfani-Cox, The Money Coach,  has listed 10 Special Tax Benefits for Parents in 2013:

“1. Exemptions for Dependents

In most cases, you can claim your child as a dependent on your tax return. That starts from the year in which your son or daughter was born and generally runs until he or she is under age 19 or under age 24.

According to the IRS, for each dependent you claim as an exemption on your 2012 taxes, you lower your taxable income by $3,800. This ultimately decreases your tax bill–or increases your federal income tax refund.

Here’s more detailed advice on the age limits on claiming a child as a dependent. Also, for more information, see IRS Publication 501, Exemptions, Standard Deduction and Filing Information.

2. Child Tax Credit

With the passage of the fiscal cliff agreement, for the next five years you may be able to take advantage of this special tax credit and claim up to $1,000 for each of your children under age 17. If you can’t take the full amount of the Child Tax Credit, you may qualify for the Additional Child Tax Credit.

For more information, see IRS Publication 972, Child Tax Credit.

3. Child and Dependent Care Credit

Like I mentioned, children aren’t cheap. So you may be working in order to feed those hungry mouths.

If that’s the case, and you pay someone to care for your child or children under age 13 so that you can go to work, or even just look for work, you may be able to claim the Child and Dependent Care Credit. Working families scored a major victory with this tax credit under the fiscal cliff legislation. That’s because this tax credit was made permanent.”

To see the rest of  The Money Coach’s list, head over to Ebony.com.

 

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