Got kids? Here's what to know about filing your 2023 taxes
Tax pros say there are a few tips parents should keep in mind when filing their tax returns this year
NEW YORK — There are a few tax tips parents of children 17 and under should keep in mind before filing, tax pros say. Here’s what to know:
The child tax credit has reverted lower for 2023 than in previous years, when it was expanded due to COVID. This means taxpayers with one or two children may see a lower credit for their children under age 17 than in 2021. It’s still up to $2,000 per child, though, and it can be claimed alongside the standard deduction and reduces your total tax bill, said Eric Bronnenkant, director of tax at Betterment, a financial advisory company that provides digital investment, retirement and cash management services.
The child and dependent care credit is available for expenses paid for a qualifying child for day care. It can also be used for dependents who are not able to care for themselves, if the requirements are met.
In addition, up to $3,000 per child (up to $6,000 total) can be deducted in child care costs. If you have a dependent care program through your employer, you are also allowed to deduct up to $5,000 year in pre-tax dollars, says Mark Jaeger, vice president of tax operations at TaxAct, a company based in Cedar Rapids, Iowa, that provides income tax preparation software to consumers and tax professionals.
“But you can’t double dip,” Jaeger says. “If you take $5,000 in pre-tax dollars and you have two children in child care who qualify for child care deductions, you can only take $1,000 in remaining dependent care expenditures before reaching that $6,000 maximum.”
Congress has been looking at expanding the child tax credit. Depending on your income bracket and the number of kids
Read more on abcnews.go.com
