The Child Tax Credit is a tax benefit that provides financial assistance to families with qualifying children. Here are some key points about the Child Tax Credit:
1. Eligibility: To qualify for the Child Tax Credit, the child must be under the age of 17 at the end of the tax year and meet certain criteria, including being a U.S. citizen, U.S. national, or U.S. resident alien.
2. Credit Amount: The credit amount is up to $2,000 per qualifying child. Additionally, there is a refundable portion of the credit, known as the Additional Child Tax Credit, which allows eligible families to receive a refund if the credit exceeds their tax liability.
3. Income Limits: The credit amount is subject to phase-out for higher-income taxpayers. The phase-out begins at a certain income threshold, and the credit gradually decreases for taxpayers with higher incomes.
The Dependent Care Credit, also known as the Child and Dependent Care Credit, is designed to assist families with the costs of childcare and dependent care expenses to enable parents or caregivers to work or seek employment. Here are some important details about the Dependent Care Credit:
1. Qualifying Expenses: The credit can be claimed for qualifying childcare or dependent care expenses incurred to enable the taxpayer and, if married, their spouse to work or look for work. Qualifying expenses may include daycare costs, summer day camp expenses, and expenses for care provided by a qualified caregiver or facility.
2. Eligibility: In order to claim the credit, the taxpayer must meet certain criteria, including earning income from a job or self-employment and having qualifying expenses for the care of a child under the age of 13 or a dependent who is physically or mentally incapable of self-care.
3. Credit Amount: The credit amount can be up to 35% of qualifying expenses, depending on the taxpayer's adjusted gross income. The maximum amount of qualifying expenses that can be used to calculate the credit is $3,000 for one dependent or $6,000 for two or more dependents.
At JERNIK Tax Solutions Tax Services, we offer top-notch tax preparation services that are designed to meet your specific needs. Our experienced tax professionals are committed to maximizing your refund and minimizing your tax liabilities. Whether you are an individual or a business owner, we have the expertise to get your taxes done right, the first time. Trust JERNIK Tax Solutions to take care of your tax needs and relieve the stress of tax season!
Don't miss out on possible deductions and credits, due to a lack of documentation!
1. If you spent money for business; it has to be documented (receipts, logs, calendars, etc)
2. Make sure you have all IDs, Birth Certificates, and Social Security cards of all personnel you intend to claim
3. Get all mortgage, tuition, investment, royalties, and 1099 documents for submission
4. If you had a business OR side hustle that you operated with the hope of making a profit - Bring all income and expense spreadsheets/documents.
W-2 earners, who are typically employees receiving a regular paycheck, may be eligible for various tax benefits on their returns. Some common ones include:
Standard Deduction: W-2 earners can benefit from the standard deduction, which reduces their taxable income. The amount varies based on filing status.
Earned Income Tax Credit (EITC): This credit is designed to assist low to moderate-income earners. The amount depends on income, filing status, and the number of qualifying children.
Child Tax Credit: If you have dependent children, you may qualify for the Child Tax Credit, which provides a credit per qualifying child.
Education Credits: W-2 earners or their dependents pursuing higher education may be eligible for education-related credits like the American Opportunity Credit or the Lifetime Learning Credit.
Retirement Contributions: Contributions to retirement accounts, such as 401(k) or Individual Retirement Accounts (IRAs), may be tax-deductible, reducing taxable income.
Remember that tax laws can change, and individual circumstances vary. It's advisable to consult with a tax professional or use tax software to ensure you're taking advantage of all applicable tax benefits.
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