Child Tax Credit

Having children is no easy task and it is often more expensive than the average parent feels like they can afford. Luckily, parents can get a child tax deduction or child tax exemption for every child they have that lives with them. Additionally, low income workers can enjoy the earned income credit as well as the dependent tax deduction if their income is below a certain amount and they have a qualifying dependent.

Understanding the Different Tax Liability Reductions

It is understandable if the differences in deductions, exemptions and credits are confusing. Put simply:

Deduction vs Exemption

A child tax deduction I not the same thing as a child tax exemption. Deductions lower your tax liability while exemptions are tax breaks that reduce your taxable income. This disparity in tax treatment can result in a huge difference in the amount of taxes you owe each year and the amount of refund you receive.

Dependent Deduction vs Child Tax Deduction

The dependent tax deduction differs from the child tax deduction because taxpayers may be able to take it for dependents that are not their children.

Earned Income Credit

Earned income credit is a special tax credit that offers a refund to individuals within a certain income level.  

Child Tax Credit Accountant Help

Experienced and knowledgeable child tax credit financial professionals can help you sort through all your credit, exemption and deduction options and determine which work most substantially in your favor. A child tax credit professional can also help you find compliant ways to combine deductions, credits and exemptions to help create a better financial future for you and your family.

Don’t let these important tax savings pass you by, contact a financial professional today.