An IRS moratorium on tax filings is in effect until the end of January, so now is a perfect time for families to get their forms together and start figuring out how to proceed with the process. Couples will have to determine if they want to file single or joint returns, child tax credits will need to be calculated and other miscellaneous sales and earnings receipts need to be accounted for. Getting some financial tips on how to manage all these documents and dollar amounts could make the process much easier.
Choosing whether to submit married filing jointly or married filing separate returns is something new couples usually go through, but in many cases the deductions are payout are better for sending in separate returns. Be certain that both parents don’t claim all of the kids – in these cases, calculating which person stands to gain the most benefit from using child exemptions is key.
Communication is of the utmost importance in filing separate returns, so if that’s the course that people pick, making sure that all financial plan informationand other essential numbers are the same on each form can ensure that neither spouse gets audited.
Dependents and child care
For married couples where only one person worked, filing as head of household is an option, and so is claiming your significant other and any other offspring as dependents. These care credits can add up quickly, so making sure all of them are entered properly can help ensure that the maximum refund is achieved.
Nolo Online reminded families that there is a difference between the child tax credit and dependent exemptions, so getting both listed is important for receiving the right amount of compensation from the IRS. The source wrote that these credits are worth $1,000 each, whereas the exemptions were likely only to render about one-third that amount on the total remittance from the federal government. Not all parents are entitled to one or both of these write-offs, so ensuring that all the proper substantiating documents are present for those trying to claim them is critical for expedited processing.
Daily Finance added that earned income credits may be available to those without any dependents at all. The IRS has an online resource for helping taxpayers determine if they fall into this category, and for many low to middle income families, these credits can be a lifesaver.