Okay i dont understand how this works
i have a son that is two months old now
and i know i claim him on my taxes
but some people told me i should get money
and others say we get tax credit?
which i dont understand what that is
Can anyone explain this to me?
2007-11-09 09:56:47 · 4 answers · asked by ♥ Stephanie Louise♥ 4 in Business & Finance ➔ Taxes ➔ United States
Some tax credits are non-refundable and used to reduce your tax liability.
Once you find your taxable income, you'll know your tax owed. Tax credits like the Child Tax Credit, Education Credits, Child/Dependent Care Credits will reduce the tax. Sometimes, it will reduce it to zero.
Now there are tax credits that are refundable, like the EIC and Addition Child Tax Credit. These will be added to your refund. That's why you see people with $4,000 or $5,000 tax refund checks.
You can always try out a guesstimate on H & R Block's Calculator. This could give you a rough idea on what you might get back and why.
2007-11-09 10:24:32 · answer #1 · answered by Celeste 6 · 0⤊ 0⤋
First, you get to claim a personal exemption for having the child during 2007.
Second, you get to claim the $1000 Child Tax credit as well. This is not a refudable credit. That means that the most that you will get back is $1000. Before this credit is used, if your tax liability is only $500, then you will only get $500. The excess is lost.
Third, you may be able to claim the Additional Child Tax Credit. There are rules to this which will be covered in the IRS book that you get at the beginning of the year.
Fourth, if you have a regular babysitter, then you may be eligilble for the Child Care Credit. Again, this should be included in the tax book.
Last, depending on your income, you may be eligible for Earned Income Credit. This is a refundable credit. That means you can still get the credit if your tax liability is zero.
2007-11-10 08:07:01 · answer #2 · answered by Steve 6 · 0⤊ 0⤋
There is no quick answer. You can claim an additional exemption for him on your tax return and you may be eligible for other tax credits. Your total tax owed, if any, will depend on your income and filing status.
2007-11-09 18:08:18 · answer #3 · answered by npk 7 · 0⤊ 0⤋
visit the IRS website: it is full of useful information.
www.irs.gov
2007-11-09 21:20:58 · answer #4 · answered by Ms. Angel.. 7 · 0⤊ 0⤋