According to the
Internal Revenue Service (IRS), “The IRS will begin accepting tax returns on Jan. 29, with
nearly 155 million individual tax returns expected to be filed in 2018.
The nation’s tax deadline will be April 17 this year – so
taxpayers will have two additional days to file beyond April 15.”
If you’re a parent of a minor child, you will be interested in learning
about the 2018 changes to the Child Tax Credit, which affects both parents
and guardians of children who are under the age of 17 in all 50 states.
In a nutshell, the Child Tax credit was doubled in 2018. In 2018, the Child
Tax Credit went from $1,000 in 2017 to $2,000 in 2018. So, if you have
one child, you will be able to claim a $2,000 credit and if you have two
children, you can claim a $4,000 credit, and so on.
It is a ‘Credit’ Not a Deduction
It’s important to note that it’s a “credit” not
a “deduction.” While a deduction reduces your taxable income,
a credit operates differently; it reduces the taxes you owe dollar-for-dollar.
For example, let’s say you’re an independent contractor who
is on 1099s and you owe the IRS $10,000 this year and you have two children.
Since you owe $10,000, you deduct the $4,000 from your tax credit –
now your tax bill is only $6,000.
Another big change to the Child Tax Credit in 2018 is the income qualification.
Prior to 2018, the Child Tax Credit was only available to low and middle-income
taxpayers. For example, in 2017, you could not use the credit if you were
married and filing jointly and had a household income above $110,000.
In 2018, the threshold for married filers was increased to $400,000. If
you are getting a divorce, continue reading.
When parents are divorced, as a general rule, only one parent can claim
all of the child-related tax benefits for their children, including the
Child Tax Credit. For details, we suggest reading the IRS’s page
“Divorced and Separated Parents.”
If you need legal assistance with a divorce or
family law matter, don’t hesitate to
contact our firm for a consultation with a Las Vegas divorce and
child custody attorney.