Tips For Michigan Parents: Saving Money on Your Taxes (Pt. 2)

It’s tax time, which means an opportunity to make your money work for you! (Legally, of course!)

 

Welcome back! We know taxes aren’t the most exciting subject, but we also know that most people could stand to save a few bucks. So we put his list together for you with pointers on how to save money this tax season. In the previous segment, we talked briefly about four ways parents could save money on their taxes this year: Dependents, the Child and Dependent Care Credit, Child Tax Credit, and Earned Income Tax Credit. Moving on, we are going to wrap this up by addressing the last four important tax tips for parents.

 

Education Tax Credits:

 

Higher education is expensive! For those of you who are pursuing degrees, every little bit helps. There are two different credits available to you – the Lifetime Learning Credit, and the American Opportunity Tax Credit. Both may reduce how much you owe in taxes. Additionally, if the credit happens to reduce your tax to a number less than zero, you might even get a refund.

 

In order to see if you qualify, use the Interactive Tax Assistant Tool that the IRS provides. Also, visit the Education Credits page to find out more, and this page for info on Tax Benefits for Education. Remember, you’ll have to complete education credits at school, fill out Form 8863, and then file a tax return in order to claim these credits.

 

Student Loan Interest:

 

In addition to the tax credits and benefits mentioned above, you might also be eligible to deduct interest that you paid on a qualified school loan in the last year, or on money you saved towards higher education. This could be for schooling for yourself or, in some cases, for another student in your immediate family. Even people who don’t itemize deductions on their taxes might qualify. For more information about Tax Benefits for Education, read this.

 

Adoption Credit:

 

If you’re an adoptive parent, you may qualify for the Adoption Credit, which is a tax credit for certain authorized costs involved in the adoption process. This credit allows you to claim both the exclusion and the credit for expenses of adopting an eligible child. For more information on Qualified Adoption Expenses, read this.

 

Self Employed Health Insurance Deductions:

 

For people who are self employed and also have been paying for their own health insurance, you might be eligible to deduct certain premiums that you paid out during the year. This may even include the cost of having your children covered under your insurance, even if they are no longer dependents. However, this only applies to your children under the age of 27. For more information on Business Expenses, read this.

 

Now is a good time to update your important documents!

 

We hope this has been helpful for you and your family, and will provide you with some legal methods for saving money in this tax season. However, please remember that many of these tax laws will be different next year, so be sure to check the IRS website, or talk to a tax accountant, or a Certified Public Accountant when you are ready to file your 2018 taxes!

 

As we mentioned in the previous article, tax time is the perfect time of year to review your “important documents” and get them updated. Review your Will, Living Will, Trust, Durable Power of Attorney and Designation of Health Care Advocate. The experienced attorneys at Kronzek Firm can handle that for you quickly. Give us a call at 866-766-5245. We are here to help.

 

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