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New York, NY -- (SBWIRE) --
If someone has paid for the professional care of a disabled adult
dependent, or if he/she has paid for childcare for a qualifying
dependent child who was 12 years of age or younger, he/she is probably
eligible to receive a significant tax credit – the Child and Dependent
Care Credit. This tax credit can earn someone – dollar for dollar – up to 35 percent of the expense of the care he/she paid for, during the tax year.
If someone is claiming the credit for child care
he/she paid, the child must be qualified as his/her dependent, and must
be 12 or younger – or have physical or mental disabilities making it
impossible for the child to care for him/herself if over the age of 12.
If someone is claiming the credit for adult dependent care, he/she must
be able to show that the adult is incapable of self-care. He/she must
also be able to prove that the care provided allowed him/her to work
(for income) or to seek employment. If someone’s employer provides
dependent care benefits, the amount he/she claims for the credit must be
reduced by the amount he/she received as an employment benefit.
To be eligible to claim the Child and Dependent Care Credit,
the qualifying child or adult dependent must have lived in someon’s
home for over half the tax year, and someone must have paid over half of
the expenses involved in maintaining a home for him or her. In some
cases, with divorced parents, the non-custodial parent may have a right
to claim a child as a dependent. In this case, the custodial parent may
still claim the Child Care Credit, even without claiming the child as a
dependent.
“It is necessary for the provider of the childcare or adult care
services to meet specific qualifications, as well.” said
ExpressTaxRefund.com spokesperson Michele Tyson “They may not be a
dependent, and you must provide their information -- name, business name
(if they have one), address, and tax ID number (SSN or EIN) – on IRS
Form 2441.”
ExpressTaxRefund.com Gives Advice on Claiming Dependents on One's Tax Return
New York, NY -- (SBWIRE) -- Claiming dependents – whether children or adult relatives – on someone’s tax return can provide significant tax benefits to him/her. Each qualifying dependent
someone claims is an additional personal exemption. Qualifying
dependents of the correct age and relationship to someone may also make
him/her eligible for a number of different tax credits, which can save
him/her money dollar-for-dollar. These credits include:
- Child Tax Credit
- Earned Income Credit
- Child and Dependent Care Credit
Having a qualifying dependent as a single filer may also make it
possible to claim Head of Household filing status, which is usually
beneficial as well.
The IRS has very specific criteria that someone as the taxpayer – and
any child or other relative – must meet to allow him/her to claim (a)
qualifying dependent(s):
- The filer may not be claimed as a dependent on anyone else’s return.
- The dependent may not be married and filing jointly with their spouse –
unless there would be zero taxes owed for either spouse if they filed
separately, and they are receiving only a refund of withholding or
estimated payments.
- The dependent must be either a U.S. citizen, national, or resident
alien. They may also be a dependent in some cases if they are a resident
of Mexico or Canada.
- The dependent may not be claimed as a dependent by any other taxpayer.
- Qualifying children must have lived with someone for over 50 percent of the tax year.
- Someone must have been responsible for over 50 percent of the cost of a qualifying relative’s support.
“Dependents must also meet certain criteria to be considered a
“qualifying child” or a “qualifying relative.” The IRS provides
detailed descriptions of both sets of criteria.” said
ExpressTaxRefund.com spokesperson Michele Tyson. “Be aware that your tax
return will be audited if you and another taxpayer both list the same
person as a dependent.”
New York, NY -- (SBWIRE) -- Tax rates and the standard deduction amount that someone can take, are
both based primarily upon the tax filing status that he/she chooses.
Someone’s filing status depends upon his/her marital status on the last
day of the tax year, as well as whether or not he/she has a qualifying
dependent (for Head of Household status).
Married, Filing Jointly or Married, Filing Separately
Even if someone was unmarried for the majority of the tax year, if
he/she became married on or before December 31, he/she is considered
married for tax purposes. In certain special situations, married persons
who live separately from their spouses and have a qualifying dependent may be able to claim Head of Household status.
Married couples may file one tax return together (Married, Filing Jointly),
or may each file their own (Married, Filing Separately). If someone
files jointly, both his/her income and his/her spouse’s income – and
both of his/her deductions – are combined.
“In most cases, MFJ status will save you more money on your return than
filing separately.” said ExpressTaxRefund.com spokesperson Michele
Tyson. “If you are separated or in the process of a divorce, or need to
keep your finances (and tax liabilities) separate for legal reasons,
you may want to consider MFS status instead.”
Single and Head of Household
If someone was legally not married on the last day of the tax year,
his/her status is usually Single. If someone is single, but claiming a
dependent, he/she may use Head of Household status, which is usually
beneficial. Head of Household status allows a higher standard deduction
and lower tax rates than Single status.
Qualifying Widow/Widower
If someone is unmarried on the last day of the year due to the death of
his/her spouse earlier in the tax year, he/she may file Married, Filing
Jointly or Married, Filing Separately. If someone is unmarried due to
the death of his/her spouse within the two years before this tax year,
he/she may file as a Qualifying Widow or Widower, allowing him/her to
use the same standard deduction and tax rates he/she would if he/she was still married and filing jointly.
About ExpressTaxRefund.com
ExpressTaxRefund.com was founded in 2002 with the goal of helping people
prepare and file their taxes quickly, easily and affordably. Since
then, ExpressTaxRefund.com has grown to become one of the most popular
online tax preparation services. For more information about
ExpressTaxRefund.com, visit http://www.expresstaxrefund.com.
ExpressTaxRefund.Com Gives Advice on Education Tax Credits
New York, NY -- (SBWIRE) -- Education tax credits can reduce taxes owed dollar for dollar. Both the American Opportunity Credit and the Lifetime Learning Credit may be claimed for education expenses including tuition, fees, textbooks,& supplies, and equipment required for
classes. Expenses such as student insurance, transportation to the
educational institution, and personal expenses cannot be claimed for
the purposes of either credit.
American Opportunity Credit
The American Opportunity Credit (AOC) allows taxpayers to get a dollar-for-dollar credit toward their taxes
for up to $2,500 for each eligible student they claim. Eligibility is
based on type of education (must be going for an undergraduate degree
or certain certifications), and amount of time enrolled (must be at
least a half-time student for at least one academic period during the
year). In addition, the taxpayer claiming the credit may not have a
felony drug conviction on his or her record.
In the case of the American Opportunity Credit, even if one does not
owe any taxes, he/she can receive up to $1,000 of the credit as a tax refund – 40% of the credit is refundable.
Lifetime Learning Credit
The Lifetime Learning Credit (LLC) can garner up to $2,000 per year for
each eligible student. This credit is not limited to those working
toward undergraduate degrees or those taking a certain number of
credits per year; this means that graduate students taking just a few
classes each year may still receive the credit. Unfortunately, unlike
the AOC, those claiming the credit cannot receive a refund of any
percentage of the LLC if they did not pay taxes. This credit may,
though, be claimed by taxpayers who have a felony drug conviction.
“You may not claim either credit based on expenses you paid with grant
money, scholarships, or fellowships, or if you are claimed as a
dependent on someone else’s tax returns.” said ExpressTaxRefund.com spokesperson Michele Tyson. “Both credits are also subject to income restrictions.”
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