COLORADO SPRINGS – As you’re filing taxes this year be aware of the new changes to the Child Tax Credit. Our partner at Carlson Financial explained how it could help some people get a bigger refund.
If you have children that are 16 years old or younger at the end of a tax filing year you get a credit for each child against your taxes.
Carl Carlson, CEO of Carlson Financial, said, “So let’s say you have one child and you get a $1,000 tax credit for that child. Well, let’s say you owe $4,000 in federal taxes, well that’s a thousand credits right against that so you only owe $3,000.”
However, under the new tax law that credit amount has bumped up.
“So now it’s double. It was $1,000. Now it’s $2,000 tax credit per child which could help some people get a little bigger refund.”
On top of that, more people can take advantage of the Child Tax Credit.
“If you made more than $75,000 filing single then they would start to reduce that and it would eventually go away, or if you made more than $110,00 filing joint they would start to reduce that tax credit and it would eventually go away.”
Now, if you’re a single filer you can make up to $200,000 and still get the full credit and if you’re married it counts all the way up to $400,000.
Carlson also wants people to be aware of some of the things the government has done away with. Under the tax reform bill the personal exemption was eliminated, the money you could deduct for yourself and for each of your dependents which was $4,050 per person.
Carlson Financial is a sponsor of Financial Focus.