As a regular, tax-paying citizen, I can attest to the difficulty of surviving the world of taxes as it is these days. While corporations see endless breaks and advantages, we are taxed at heavier rates and prevented from utilizing many of the private resources that originally existed to help us all through this life. Where’s my tax break? Well, there are some small things that we count on including the 2012 additional child tax credit.
The child tax credit amount comes out to 1,000 dollars per child. The child tax credit, as opposed to a tax deduction, will actually take away tax dollars owed instead of just lowering taxable income. The amount of this credit can only be received for each child under the age of 17 in your house. There are some requirements that need to be fulfilled in order for a child to count for the child tax credit amount 2012.
Also, the 2012 child tax credit amount can be taken in addition to your dependent tax exemptions that you’ve claimed. This obviously makes it a superior benefit when compared to a run-of-the-mill tax deduction.
But the full amount of the 2012 child tax credit can only be received by those children under 17 who is your legal child by blood or adoptive proceedings, your legal child or stepchild or your legal grandchild. This can be claimed for foster children as long as your foster child lived in your house for the full length of the tax year .
Are they taking away the 2012 child tax credit? No, but in 2012 the credit amount goes down to $500 per child.
You must be prepared to have each child’s Tax Identification Number (TIN) and/or their Social Security numbers for legal purposes. This shouldn’t startle anyone because real proof of your legal guardianship is an obvious requirement for getting the child tax credit amount.
The amount of the child tax credit will not (most of the time) directly result in giving you extra money. At the very most, it can reduce your tax liability to zero; the remainder “amount” of the child tax credit will simply not exist.
There are some cases where the 2012 child tax credit amount exceeds your tax liability, but you can get what’s called the child tax credit refund. This is what’s referred to as the additional child tax credit, and can be worked with on income tax form 8812.
If you are a family with three eligible children or fewer, then the child tax credit can be refundable for up to fifteen percent of your taxable earned income that is greater than three thousand dollars.
Now, if you are a family with four or more eligible children for the child tax credit amount, then the refundable amount may be in excess of your Social Security taxes over the earned income tax amount. Or, it can be in excess of three thousand dollars, whichever route is greater will be the best to take.
Sounds confusing, huh? If you file you taxes online with a company like TurboTax, all of this guesswork and research and calculation is automatically done for you as you submit relevant information during the tax filing process.
The route which will guarantee the most money back to you will be the route automatically taken, as their 100% biggest refund guarantee is no idle boast.
There were some changes in 2009 that saw the threshold of 12,500 move to 3,000 which has made it much easier to qualify for the refundable additional child tax credit amount.
It should be noted that the otherwise child tax credit amount is phased out for those taxpayers with a modified adjusted gross income above certain thresholds. If this is indeed the case, then the amount of the child tax credit will be reduced (not below zero) by $50 per $1,000 your modified adjusted gross income surpasses the threshold amount.
The threshold phase in amounts are $110,000 for joint returns, $75,000 for single filers, and $55,000 for married people filing separately.
Taxpayers paying the alternative minimum tax can use the amount of the child tax credit to positively affect it.
Like mentioned above, by filing with an online tax company like TurboTax Online, the amount of the child tax credit will be automatically applied as you enter in all relevant tax information. You can also utilize their income tax calculator to estimate how claiming the child tax credit will affect your income taxes. The estimator can be used prior to actual filing, and also during the actual filing, in a way.
The only tax filing package that you have to pay for up front is the TurboTax “business” package. All of the rest you can begin for free and are only obligated to pay for upon reaching the very last page when you click “send and file.”That means that you can get a real-life glimpse at exactly what your finances will look like including all relevant credits and deductions regarding the child tax credit amount.