Tax credits for families

The Street

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.

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