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Eight Tax Benefits for Parents

January 27, 2011

Did you know that your children may help you qualify for some tax benefits? Here are 8 tax benefits to consider when filing your tax returns this year.

  1. Dependents. In most cases, a child can be claimed as a dependent in the year they were born.
  2. Child Tax Credit. You may be able to take this credit on your tax return for each of your children under age 17. If you do not benefit from the full amount of the Child Tax Credit, you may be eligible for the Additional Child Tax Credit.
  3. Child and Dependent Care Credit. You may be able to claim the credit if you pay someone to care for your child under age 13 so that you can work or look for work.
  4. Adoption Credit. You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child. Taxpayers claiming the adoption credit must file a paper tax return because adoption-related documentation must be included.
  5. Children with Earned Income. If your child has income earned from working they may be required to file a tax return.
  6. Children with Investment Income. Under certain circumstances a child’s investment income may be taxed at the parent’s tax rate.
  7. Higher Education Credits Education. Tax credits can help offset the costs of education. The American Opportunity and the Lifetime Learning Credit are education credits that reduce your federal income tax dollar-for-dollar, unlike a deduction, which reduces your taxable income.
  8. Student Loan Interest. You may be able to deduct interest you pay on a qualified student loan. The deduction is claimed as an adjustment to income so you do not need to itemize your deductions.

Source: IRS
Clergy Financial Resources
http://www.clergytaxnet.com

Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations.

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