New parents need to know these 9 things before filing their taxes this year. (via CNBCMakeIt)
There's also a non-refundable $500 credit for other qualifying dependents who may not otherwise meet the requirements for the larger child tax credit. If you have children under 23 who are still living at home or if you are supporting grandchildren, you can claim the credit.sees is that parents forget to claim child care expenses. "When you pay for someone to care for your child and utilize a daycare center, these expenses qualify for the dependent care credit," he says.
of up to 35% of these out-of-pocket costs up to $3,000 for one child or up to $6,000 for two or more. Again, this is a tax credit and refundable up to $1,400, so if you don't owe the IRS any money and you apply this credit, you'll get up to $1,400 back. The credit does have some limitations, Tobey says. It only applies to children under 13, or if you have older children with mental or physical disabilities who are unable to care for themselves. The percentage you can deduct ranges from 20% up to 35%, depending on your income level. The more you earn, the less you can deduct.
If you use child care, check with your employer to see if they offer a child care flexible spending account. Similar to a health FSA, these accounts allow you contribute money tax-free toward your child care expenses. For someone in the 28% federal tax bracket, this income reduction means saving $280 in federal taxes for every $1,000 spent on dependent care with an FSA, Tobey says.
You don't need to itemize in order to take advantage of the child tax credit or the child and dependent care tax credit. "You can claim the standard deduction and still get the Dependent Care Credits," says Pon.How you classify yourself can affect how much you can deduct from your tax bill. The standard deduction for a single person in 2019 is $12,200, which is the amount of income that's not subject to federal income tax.
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