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Babies: 3 - 6 Months
Some tax info for those interested
Just a couple tidbits (if you don't already know). I'm not a tax attorney or a CPA, but these are two things on my mind this tax season.
First, you do not want a refund. Yes, you read that correctly. A refund means that you gave the gov't an interest free loan for the year. The goal is to have the amount withheld that will leave you neither owing or receiving money at the end of the year.
Second, if you gave birth at any point in '09, you are entitled to the entire year's worth of tax deduction. (Most of you probably already know this.) BUT - the $1,000 child credit partially "refundable." This means that lower-income families who don't owe income tax can get a government check for part of the credit. Also consider whether you qualify for Earned Income Tax Credit. When a couple's modified adjusted gross income reaches $110,000 ($75,000 for single parents), they start to lose the credit. In 2009, exemptions start to phase out at $250,200 for couples (joint file) and $208,500 (single parent). Some families making far less lose the exemptions if they are stuck in the alternative minimum tax, which does not allow for any personal exemptions. Deduction is as follows:
$3,650 off your taxable income per child; or
$1,000 per child off tax bill
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Re: Some tax info for those interested
FINALLY someone understands what taxes are!!!
I feel like everyone thinks its free money when in fact its money you earrned that the government is holding and using.. Like you said an interest free loan HAHAH
Yes, I would pesonally prefer to have my money earning interest for me! It is not money the government gives to you, it is your money being returned to you! My DH and I were just talking about this and plan to adjust so we hopefully don't owe or get a refund.
Better than never seeing it at all, that's for sure!
us too...although we had to pay last year (DH started a new job & told them the wrong way to do his W-2), so i'll take a refund over a bill anyday.
$3,650 off your taxable income per child; or
$1,000 per child off tax bill
So you can only get either/or?
I like getting the big refund check. But that's cause interest rates suck right now and I don't like to have to save as much. It would be too tempting to spend for me and would be wasted.
Thanks for the tips.
I thought when you have a baby or a dependent living in the house you could claim head of household? When I did my taxes earlier this week (Turbo Tax) it said something about she had to have lived with me for at least 6mths out of the year. Why does that sound silly...am I doing something wrong/or read it wrong? I filed single (we're not married). We both own homes, but he lives with me (we're restoring both houses and selling them eventually - I pay for mine, he pays for his). Hannah was born in August.
More background - I was devorced in 2007, so I file devorced/single until I get remarried.
The six-month rule is for dependents, but new babies don't count. It's basically to be sure you aren't accounting for someone who does not really live with you. The rule also makes certain that joint custody situations are properly treated. It's kind of like how they treat folks who live in Florida for part of the year to avoid (I think it is the) personal property tax... they have to be present in the state for at least six months of the year.
I figured. I tried like hell to change it on Turbo Tax but it would just keep taking me to the same screen. I'll try again tonight, even though I've already submitted my taxes on line. Every year I swear I screw my taxes up and have to do an addendem!
This is misleading. You get a deduction of $3,650 per qualifying child AND a $1,000 tax credit (max) per child.
Tabby, did you try to change it when you enter all the info in the personal information page.
i don't use turbotax, but most DIY software is the same. when you enter your daughter's information it should ask you how long they lived with you. for your purposes, the answer is 12 months.