If you're a parent, your dependent children can be a source of tax savings. There are the well-known provisions in the tax code such as the Dependent Child Care Credit and the Child Tax Credit, but there's also an opportunity to shift some taxable income to your children.
Shifting income to your children works because the tax rate increases as your income rises. This provides an incentive to shift income to your lower-earning dependent children. Here's how to make it work:
As your children grow older, you can easily be surprised by a larger tax bill. To help ease the possible burden, consider these tax implications as your dependent children age.
IRS Issues Reminder on Child Tax Credit
Working parents should be aware that the child and dependent care tax credit is available to offset some of the expenses for child care. Six facts the IRS wants taxpayers to know about the credit:
There are big moments in everyone’s life. A new birth is one of them. The irony is that most life events also have tax consequences attached to them. When a new member is added to your family or someone you know, here are some tips to consider.
Hiring family in the family business can cut taxes
As the summertime school vacation season approaches, young family members may be looking for a job - and having a hard time finding one. Hire them in your family business, and you get a double benefit: helping the kids gain valuable experience and garnering tax breaks for your company.
Here's what you need to know.
Your children may need to file a 2013 income tax return. A return is needed if wages exceeded $6,100, the child had self-employment income over $400, or investment income exceeded $1,000. If the child had both wages and investment income, other thresholds apply. Contact us for more information or filing assistance.