Important Blended Family Tax Considerations

Blended Family Tax Considerations

Blended family taxes are not the same. What worked for the single mom or dad raising their family does not necessarily benefit the married couple working together. There may be two incomes, changing the tax situation dramatically. You must now file married filing jointly as opposed to single or head of household. Each of these things is a consideration as to how to proceed with your filing.

Notwithstanding filing status changes, there are many considerations to be made in respect to your tax situation. Here is a summary of some important tax breaks every blended family should investigate:

Child and Dependent Care Credit & Flexible Benefit Plans The Child and Dependent Care Credit is for expenses paid for the care of children under age 13, or for a disabled spouse or dependent, to enable the taxpayer to work or look for work.

Child Tax Credit The Child Tax Credit is for people who have a qualifying child. The maximum amount of the credit is $1,000 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses.

Hope & Life Time Learning Educational Credits There are two education tax credits available, the Hope Credit and the Lifetime Learning Credit. The credits are based on education expenses paid for you, your spouse, or your dependents. During any particular year, you can claim only one of the credits for each student.

Earned Income Tax Credit The Earned Income Tax Credit is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the credit

Student Loan Interest You may be able to deduct interest you pay on a qualified student loan. And, if your student loan is canceled, you may not have to include any amount in income. The deduction is claimed as an adjustment to income so you do not need to itemize your deductions on Schedule A Form 1040.

Savers Credit Savers Credit (formally called the Retirement Savings Contribution Credit) You may be able to take the credit of up to $1,000 (up to $2,000 if filing jointly) if you make eligible contributions to a qualified IRA, 401(k) and certain other retirement plans.

The Internal Revenue Service has vastly more detailed information on Tax Credits and deductions that may benefit your blended family tax situation.

Getting educated is the best thing you can do for your family when it comes to your money, finances and taxes. A good CPA is the best way to ensure you are making the most of your financial situation in regards to your taxes. I can definitely recommend these guys...

Go to More Blended Family Tax Considerations... for more information regarding how to adjust for your new tax situation.