Thursday, November 29, 2007

Potential Tax Credits For Having Children

Since our daughter is only three years old, I'm still learning all the tax credits that are potentially available to taxpayers with children. Here are some of the ones that I have identified so far. I've included the updated numbers I found for the 2007 tax year for Married Filing Joint (MFJ) status.

Credits for 2007 Tax year*
TypeMaximum BenefitMFJ Phaseout Begins atMFJ 100% Phaseout at
Child Care Credit$1,050 per child
$2,100 maximum
$15,000**43% phaseout at $43,000**
Adoption Credit$11,390$170,820$210,820
Child Tax Credit$1000 per child$110,000 $110,000 + $20,000 for each child
Additional Child Tax Creditup to $1000 per childn/aearned income below $11,751
Hope Education Credit$1650 per child$94,000$114,000
Lifetime Learning Credit$2000 per family$94,000$114,000
Earned Income Credit

$2853 - one child
$4716 - 2 or more

$14,180**$35,241 for one child
$39,783 for 2 or more

*While the sources are believed to be good, My Wealth Builder cannot guarantee the accuracy, timeliness or completeness of the information in the table.

** 2006 tax year number.

I was surprised to find so many possible credits (and large credit amounts) for taxpayers with children. The ones we'll be able to use in the near term are the child tax credit and the adoption tax credit. Hopefully, the education credits (Hope and Lifetime Learning) will still be available when our daughter attends college.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or tax advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC

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