Learning Credit. Both credits may reduce the amount of tax you owe and are claimed by filing IRS Form 8863. If the American Opportunity Credit is more than the tax you owe, you could be eligible for a refund of up to $1,000. However, your adjusted gross income had to be less than $90,000 if single and $180,000 if married filing jointly to qualify for the credits. Your children may help you qualify for valuable tax certain credits and deductions listed below when filing your 2013 taxes.
1. Dependency Exemption. In most cases, you can claim your child as a dependent who lives with you regardless of when the child was born as long as you provide more than 50 % of the child support.
2. Child Tax Credit. You may be able to claim the Child Tax Credit of $1,000 for each of your children that were under age 17 at the end of 2013 by filing form 8812. However your adjusted gross income must be less than $75,000 if single and $110,000 if married filing jointly to qualify for the credit.
3. Child and Dependent Care Credit. You may be able to claim this credit if you paid someone to care for your child or children under age 13, so that you could work. The credit is claimed on IRS Form 2441. However, if you are married filing jointly both parents must work to be eligible for the credit.
4. Earned Income Tax Credit. If you worked but earned less than $51,000 in 2013, you may qualify for Earned Income Tax Credit. If you have qualifying children, you may get up to $5,900 dollars extra back when you file a 1040 tax return and claim the credit on Schedule EIC.
5. Adoption Credit. You may be able to take a tax credit of up to $12,700 for certain expenses you incurred to adopt a child. You must file IRS Form 8839 in the year the adoption is finalized and your modified adjusted gross income had to be less than $190,000 to qualify for the full credit.
6. Higher education credits. If you paid higher education costs for yourself or another student who is an immediate family member, you may qualify for either the American Opportunity Credit or the Lifetime.
7. Student loan interest. You may be able to deduct interest you paid on a qualified student loan, even if you do not itemize your deductions on IRS Form 1040, line 33. However, your adjusted gross income must be less than $75,000 if Single and $155,000 if married filing jointly to claim the deduction.
8. Self-employed health insurance deduction – If you were self-employed and pay for your own health insurance, you may be able to deduct premiums you paid not only for yourself but to cover your child. It applies to children under age 27 at the end of the 2013, even if they are not your dependent.
If you have any questions or need help in preparing your taxes please contact Gregory J. Spadea of Spadea & associates, LLC in Ridley Park, Pennsylvania at 610-521-0604. He prepares tax returns year round and can amend an earlier year return if you missed taking advantage of one of the credits listed above.
