Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Their college education costs more than twice what I paid for my home!
Whew! Raising children is an expensive proposition. The Tax Code provides some help. I’ve compiled a list of child-friendly tax credits, all of which have income limits.
Explore these and see which ones will work for you:
The EITC is a tax credit for people who work and earn low wages. In 2010, the maximum credit is $5,666 (with three or more qualifying children); with one qualifying child, the credit is worth up to $3,050 (and you can earn up to $457 with no qualifying children). Your earned income and adjusted gross income must each meet certain limits, with less than $3,100 of investment income. The maximum advance you can get from your employer is $1,830.
Learn more at http://www.irs.gov/individuals/article/0,,id=96406,00.html.
This credit is worth up to $1,000 per child. Although it is limited to your tax liability, the Additional Child Tax Credit makes some or all of the difference refundable.
Learn more at http://www.irs.gov/newsroom/article/0,,id=106182,00.html.
This is a nonrefundable credit, so if you have no tax liability, you get nothing. Essentially, the tax credit is limited to $600 for two children. Both parents must work. If either is a full-time student or permanently disabled, there’s a special phantom income allocation. If you have over $3,000 in expenses per dependent, in certain cases, some expenses may be used as medical deductions. Job-related benefits may reduce the credit.
Learn more at http://www.irs.gov/taxtopics/tc602.html.
The American Opportunity Credit includes a refundable credit of up to $2,500. A whole host of education credits and deductions is available. You’ll find a comprehensive overview of the benefits in my recent MarketWatch column.
Overlooked and Underused Child-Friendly Tax Benefits
You have to pay certain expenses—child care, medical, education—but did you know there are ways to pay for them with pre-tax money? Using a flexible spending account (FSA) and taking advantage of employer benefits are two ways to spend tax-free money on expenses you’re paying anyway. And since using these strategies also reduces your Social Security and Medicare taxes, you can save over 40 percent of the cost. People are afraid to use these strategies for some reason—but you shouldn’t be!
Flexible Spending Accounts
Contributions to an FSA come directly from your own wages and reduce your taxable wages. You may contribute up to $5,000 toward dependent care and $5,000 toward health care, but you may have to wait for open enrollment to do this. Submit receipts to get reimbursed. Be warned: if you don’t submit receipts on time, you could lose this money.
Learn more at https://www.fsafeds.com/fsafeds/summaryofbenefits.asp.
Since you are paying these expenses anyway, consider renegotiating your wages, or your next raise, to have your employer pay them for you. Some of these benefits work for your own business; some don’t. Naturally, there are rules and limitations. You can get these benefits, tax-free:
1. Dependent care: Your boss may pay up to $5,000 of your dependent care costs.
2. Education assistance: The limit is $5,250 per employee. But there’s even a way around that. (See the Assistance over $5,250 section.)
Note: Age limits may vary. Each benefit has a different age limit for your child. The Taxpayers Advocate Service website has an overview of some benefits and age limits: http://www.eitc.irs.gov/central/childbenefit/.
Invest your time to see which of these benefits applies to you. You may be entitled to thousands of dollars!
Eva Rosenberg, EA is the publisher of TaxMama.com, where your tax questions are answered. Eva is the author of several books and ebooks, including Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.