IRS Reminds Parents of Ten Tax Benefits 

Your kids can be helpful at tax time. That doesn’t mean they’ll sort your tax receipts or refill your coffee, but those charming children may help you qualify for some valuable tax benefits. Here are 10 things the IRS wants parents to consider when filing their taxes this year.

1. Dependents: In most cases, a child can be claimed as a dependent in the year they were born. For more information see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information.

2. Child Tax Credit: You may be able to take this credit 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. For more information see IRS Publication 972, Child Tax Credit.

3. Child and Dependent Care Credit: You may be able to claim this credit if you pay someone to care for your child or children under age 13 so that you can work or look for work. See IRS Publication 503, Child and Dependent Care Expenses.

4. Earned Income Tax Credit: The EITC is a tax benefit for certain people who work and have earned income from wages, self-employment or farming. EITC reduces the amount of tax you owe and may also give you a refund. IRS Publication 596, Earned Income Credit, has more details.

5. Adoption Credit: You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child. If you claim the adoption credit, you must file a paper tax return with required adoption-related documents.  For details, see the instructions for IRS Form 8839, Qualified Adoption Expenses.

6. Children with earned income: If your child has income earned from working, they may be required to file a tax return. For more information, see IRS Publication 501.

7. Children with investment income: Under certain circumstances a child’s investment income may be taxed at their parent’s tax rate. For more information, see IRS Publication 929, Tax Rules for Children and Dependents.

8. Higher education credits: Education tax credits can help offset the costs of higher education. The American Opportunity and the Lifetime Learning Credits are education credits that can reduce your federal income tax dollar-for-dollar. See IRS Publication 970, Tax Benefits for Education, for details.

9. Student loan interest: You may be able to deduct interest paid on a qualified student loan, even if you do not itemize your deductions. For more information, see IRS Publication 970.

10. Self-employed health insurance deduction: If you were self-employed and paid for health insurance, you may be able to deduct any premiums you paid for coverage for any child of yours who was under age 27 at the end of the year, even if the child was not your dependent. For more information, see the IRS website.

This last one is a good tip to ask a Laughlin Associates business consultant about. As the leading incorporation services provider since 1972, we can help you as a small business owner to get the most out of your tax deductions. In fact, if you’re self-employed we can help you get as much 45% back on your taxes this time next year. Want to learn more? Call Laughlin Associates at 1-800-648-0966 or email lee@laughlinusa.com.

*Tips provided by IRS.gov

With the holidays fast approaching, our thoughts turn to “end of the year” business activities – particularly the financial reports that are due for the upcoming tax season. 

A little panic sets in wondering if we kept every receipt, tracked all our expenses in QuickBooks, and if we took advantage of the many deductions available to us as business owners.

 Here are 3 simple tips for lowering your taxes during the holidays:

1. Turn your road trip into a tax deduction: Schedule to meet with a client or a vendor on your way to the in-laws, and the mileage to the meeting (and back) is tax deductible! (Doesn’t the client deserve a nice holiday gift anyway?) Now you can truly laugh at your father-in-law’s corny jokes because you know the trip was partly paid for by the IRS!

2. Get the gift of tax deductions: Did you know that home office furniture is tax deductible even if you don’t take the home office deduction? So take advantage of the holiday sales and buy that new desk you’ve been eyeing for an extra 20-35% off! (Depending on your tax rate.) Talk about hitting the jack pot!

3. Getting your records in order will save you money: To do this we found a product created by one of our favorite tax experts, Sandy Botkin (a former IRS trainer, CPA and Tax Attorney), that we love because it has solved our Holiday Financial Panic and made taking tax deductions so easy. Taxbot is an amazing digital tax tracker that automatically tracks business mileage with a GPS Mileage Tracker, records expenses and intuitively makes them IRS compliant. It even has a built-in receipt scanner! It even syncs to a secure web portal that offers detailed integrated reports and expert tax training and tips. They really thought of everything!

This holiday season you, too, can take the stress out of tax planning with this ingenious app! 

Get your free 2-week Taxbot trial right here!

Want even more tips and tricks to get the most tax deductions possible as a business owner? Join us for a live webinar from Sandy Botkin on December 15 from 10-11 a.m. PST.

Click here to reserve your spot for “5 Strategies To Maximize Your Tax Deductions And Stay Out Of Trouble With The IRS!”

*Thank you to Sandy Botkin and the team at The Tax Reduction Institute for providing these helpful tips.