March 17, 2014
There’s no disputing the fact that raising children today is a costly endeavor. However, the American Taxpayer Relief Act of 2012 (ATRA) has eased parents’ tax burden and put a few dollars back in their pockets with the Child Tax Credit, which ATRA made permanent. This tax credit can be worth as much as $1,000 per qualifying child depending upon a parent’s income.
Because it is a tax credit rather than a tax deduction, which simply reduces taxable income, the Child Tax Credit reduces a parent’s tax liability dollar for dollar with the amount of the allowable credit. However, the credit cannot be taken for more than the amount of tax owed to the IRS.
To see if you qualify for the Child Tax Credit, the IRS provides the following seven tests:
It is important to note that your filing status and income may reduce or eliminate the Child Tax Credit. If your modified adjusted gross income is more than $110,000 (married filing joint), $55,000 (married filing separately), or $75,000 (single, head of household) you cannot claim the credit.
If you qualify to claim the Child Tax Credit, you will need to file IRS Form 8812 with your income tax return. Please contact our office if you have any questions about this tax credit.
We understand that everyone is concerned about Coronavirus. And we are as well, which is why are taking precautions to keep our clients and our staff safe. We are committed to maintaining a high quality of service and timely responses to your needs. We are continuing to monitor the situation and have implemented the following procedures:
Madsen, O'Meara and Company P.C. is excited to announce the recent launch of our firm’s new website. We’ve been working very hard to enhance our website and give our firm a fresh look. We’ve also continued to research and identify the latest and greatest technologies to improve the services we provide and ensure we continue to meet your needs.
Take a moment to look...
As a business owner, one of the hardest—yet most beneficial skills to learn—is delegation. Many people who run businesses and have staff often find delegation of duties difficult for a number of reasons—two of the most common being a perceived lack of time (the “It’s faster to do it myself” excuse) or because they have a hard time letting go of their...