There are several tax credits that families with children or dependents can take advantage of. CPA and TurboTax expert Miguel Burgos is here to help.
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00:00Well, if you have a family and you have a bunch of kids, they could be big pains in
00:08the necks, but you get some credit back for them come tax time.
00:12Thankfully, Uncle Sam understands CPA and TurboTax expert Miguel Burgos is here with
00:17us right now to talk about this.
00:19Okay, so I have, I got kids, we have families.
00:23What are some credits that families should take advantage of?
00:26Well, Tracy, in the tax code, we have many credits that are, we can say are family oriented.
00:32For example, we have the child tax credit that can go up to $2,000 and for 2024, up
00:38to 1,700 of those are refundable.
00:41Also, we have the child independent care credit.
00:43If you have a single dependent and you're paying for childcare while you work or study,
00:48you can get a credit of up to $1,050 and if you have two or more dependents, you can get
00:53a credit up to $2,100 additional to that.
00:57We have the earned income credit for 2024, the maximum amount it's $7,830 and also the
01:03education credits.
01:04If one of your children is attending to a university or college, you can claim the American
01:10opportunity credit, which goes up to $2,500 and also the lifetime learning credit.
01:15So many things, remember you can go to TurboTax.com to see what's the best option and which of
01:21this credit you qualify for and get a benefit out of them.
01:23Yeah, it's good stuff.
01:24I mean, there are AGI limitations on some of these credits, but please, please, please
01:29try to see if you qualify and of course, make sure you have your kid's social security numbers
01:33available for all of this.
01:35So one of the things, Miguel, that I think families in particular struggle with sometimes
01:38is married filing joint versus married filing separately.
01:42Is there ever a good time to do married filing separately?
01:46I feel like it's generally more beneficial to file jointly.
01:51And I agree with you on that, Tracy.
01:53In general, most cases, if it's just about the tax outcome, getting a rate or refund,
02:00married filing jointly is the best option and multiple reasons for that.
02:05Tax brackets are wider, so that means that more income is taxed at a lower rate.
02:12Additional to that, there are multiple credits that are not available if you file separately.
02:16For example, the Earned Income Credit, the Child Independent Care Credit, and also you
02:24may be affected by other limitations.
02:26You may have to see how you're going to figure out the standard deduction if one of them
02:29wants to itemize, the other one wants to claim the standard deduction.
02:32However, if you have legal reasons, let's say, for example, that a couple that has some
02:38sort of prenup arrangement, or perhaps either a taxpayer or spouse owes money that the IRS
02:45will collect through their refund, then in order to protect the refund of the other part
02:50of the tax return, either the taxpayers or the spouse, you may want to file separately
02:56just to protect your refund and avoid the responsibility of whatever the other party
03:00may owe.
03:01But remember, for the most part, filing jointly provides the better tax outcome.
03:08If you want to figure it out, go to TurboTax.com and we have experts that can help you to determine
03:13which one is most beneficial for you, either filing jointly or filing separately.
03:17Yeah, in certain instances, it's worth running it both ways.
03:21So absolutely take advantage of the products out there.
03:24CPA and TurboTax expert Miguel Burgos, thank you for sharing all this information with us.
03:29It's my pleasure.