Tax Deductions and Credits

Tax Credits and Deductions for Families

Written by Elle Martinez
Published Feb 16, 2017 - [Updated Jul 24, 2019]
3 min read

As you prepare to file your taxes, please keep in mind some helpful tax deductions and credits that may apply to your family.

First off, many families filing are a bit confused over what exactly tax deductions and credits are. While they can both help you with your tax obligation, there are differences. Tax deductions lower the income that is eligible to be taxed, which may lower your tax bracket. Tax credits, on the other hand, actually reduce your taxes owed, dollar for dollar.

There are two types of credits: non-refundable and refundable. A non-refundable tax credit will decrease your income tax owed and possibly eliminate it. You do not get a refund from it if your credit is more than your income tax owed. With the refundable tax credit, as the name implies, not only can you reduce or eliminate your income taxes, if it totals more than you owe, you can get a tax refund for the difference.

Tax Deductions for Families

If you’re looking at reducing how much of your income is taxed, here are some tax deductions you may want to check out to see if you qualify for them.

Exemptions for dependents: If you have a dependent, such as a child, then you can claim an exemption worth $4,050 for 2016. You must have a social security number for your dependent.
IRA deductions: If you’ve contributed to your traditional IRA, you may receive a deduction for your contribution, up to $5,500 ($6,500 if 50 and over).
Charitable contributions: Many of us keep receipts for charitable donations, but did you also include the supplies you purchased to help a non-profit organization?
Personal property taxes: You may have received a state and local tax bill during the year for your personal property, like a recreational vehicle. While it’s a chunk of change out of your budget, the good news is that state and local property taxes related to personal property may be tax deductible.

Tax Credit for Families

While there are many tax credits available, the most common that help families are the Earned Income Tax Credit, Child Tax Credit, and Child and Dependent Care Credit. I’ll briefly discuss the benefits of each, so you can get an idea of whether they apply to your family’s situation or not.

Earned Income Credit: Depending on your income and your family size, you may be able to take advantage of this big tax credit. For example, for 2016 taxes, the maximum credit for a family with 3 or more qualifying children is $6,269.
Child Tax Credit: For parents meeting the income requirements ( currently for couples whose MAGI is under $110,000 or $75,000 for a single parent), this credit can be worth $1,000 for each qualifying child under 17 you claim on your taxes.
Child and Dependent Care Credit: If you paid for child care for your dependents (under 13) while you worked or went to school, you may be able to take this credit based on your child care expenses up to 35% of $3,000 for one child or $6,000 for two or more children.
Adoption Credit: Those households who expanded family through adoption can use the adoption credit worth up to $13,460.

You may meet the qualifications to claim these valuable tax deductions and credits. TurboTax asks simple questions and helped us get the tax deductions and credits we were eligible for. By taking all of the tax deductions and credits that you’re family is eligible for, you can minimize your tax liability and perhaps increase your tax refund.

Elle helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second. More from Elle Martinez

14 responses to “Tax Credits and Deductions for Families”

N. Sedlak says:

April 4, 2019 at 1:02 pm

Do I understand correctly: a spouse that has no income is not deductible, but a live-in girlfriend is?

Reply
- turbotaxkasey says:
  
  April 4, 2019 at 3:21 pm
  
  Hello,
  Your spouse is still considered a dependent. There can be multiple scenarios regarding dependents. Here is a helpful article regarding the dependent changes for this tax year.
  https://blog-turbotax-intuit-com-develop.go-vip.co/tax-deductions-and-credits-2/family/who-can-i-claim-as-a-dependent-7658/
  Hope this helps. Thanks
  
  Reply
Richard Moten says:

February 10, 2019 at 5:30 am

Hello, can my Mother-n law be claimed on tax form if she stays here with wife and i?

Reply
darlene says:

February 6, 2019 at 3:09 pm

Hello, I wanted to know will my husband back child support be taken from my taxes if i file married? and also i have my father living with us since my mom passing 7 mos ago can i claim him? i don’t want my husband past debt affect me since this happen before i met him.

Reply
Mary J Stewart says:

December 19, 2018 at 5:21 am

I am retired living off social security and small check from where I worked. I am married and also raise our grandchildren plus 25 year old son Are their any benefits I can receive? Also the info for tax year 2017 was purely a guesstimization. Since weve not received our documents yet

Reply
SHALITA M ADENIYI says:

October 12, 2018 at 7:17 am

Hello! My question is about a child that is 17 ? My son will be 18 this year and still in high school not working can I still clam him on my 2019 taxes as a depended ?

Reply
Venus Strozier says:

October 8, 2018 at 6:01 pm

Last year i couldnt get the child tax credit because my daughter turned 16 in Dec of 2017 now they are changing it again to if your child turn 17 in 2018? So can i go back and get the child tax credit i didnt get when filing my 2017 taxes

Reply
Daniel Hawley says:

December 16, 2017 at 5:34 pm

I have a question about claiming my children during the year. Right now i do not claim on my w4 but during tax time i claim the am i losing money by doing this
Thank Daniel

Reply
Sue says:

February 24, 2017 at 10:09 am

Are there any issues switching to a new computer when you’ve filed on a different computer for previous years?

Reply
- TurboTaxLisa says:
  
  February 24, 2017 at 5:30 pm
  
  Hi Sue,
  No there are not any issues you just need to log in using your same user number and password.
  Thank you,
  Lisa Greene-Lewis
  
  Reply
Amy Mulvey says:

February 22, 2017 at 5:24 pm

I just did my income tax return and was very disappointed with not being able to get the child credit because my daughter turned 17 in Oct 15th,2016. Why am I not able too get credit for the 9 months she was 16? She is still in high school besides, doesn’t that count for some type of credit?

Reply
Rebbeca watts says:

February 1, 2016 at 5:03 pm

I work with a temp job I made like 3000 working in 2015 can I still claim my child and I heard u don’t get any tax return at all is that true

Reply
Jim Sarubbi says:

March 6, 2015 at 12:21 pm

I pay over $24,000 a year on daycare for my 2 kids. Why can’t I deduct the entire amount? $6,000 maximum is a joke and every year that I’ve claimed it, it has been the same.

Reply
Colleen davis says:

March 12, 2013 at 1:04 pm

I filed my son’s taxes after using TURBO tax for the past 10 years…..and this year for some reason they messed up and RE-charged him the 381.00 he had to pay for unemployment from 2011 that he paid in 2012. NOW they are taking his refund plus saying he owes the other 194.00 cash even though he DID pay that last year??? WHAT IS WRONG WITH TURBO TAX>?

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