families with children

Families With Children

Mid America Tax Planner


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Liability Up to 50% in next 30 days!

Ph: (913) 210-4765


Child Tax Credit

Maximum credit: $2,000 per qualifying child.

Adjusted Gross Income (AGI) Phaseout

The credit is reduced by $50 for each $1,000 of modified

AGI above:

• $400,000 Married Filing Jointly.

• $200,000 Single, Head of Household, Qualifying

Widow(er), or Married Filing Separately.

The regular child tax credit is nonrefundable, but if anypart of the credit is disallowed because tax is reduced to

zero, the taxpayer may qualify for the Additional ChildTax Credit, which is refundable.

Family Tax Credit

Maximum credit: $500 per qualifying dependent.

A nonrefundable credit of up to $500 is allowed for dependents

other than a qualifying child for the Child Tax


Additional Child Tax Credit

Up to $1,400 of the Child Tax Credit is refundable. Taxpayersmay be able to claim the additional credit if a portionof the regular Child Tax Credit was disallowed becausetax was reduced to zero before the entire credit was used.

The portion of the Child Tax Credit phased out becauseof AGI cannot be used to claim the additional credit.

Child and Dependent Care Credit


The credit is 20% – 35% of the smallest of:


With Children

Earned Income Credit (EIC)

The EIC is a refundable credit for low-income earners.Taxpayers with investment income of more than $3,500

Do not qualify.

Requirements for Everyone

The following requirements must be met whether ornot the taxpayer has qualifying children.

Valid Social Security Numbers. Taxpayer and spouse(if filing jointly) must have valid Social Security Numbers.

Qualifying children must also have valid SocialSecurity Numbers except a child who was born and

died during the year. Adoption and individual taxpayeridentification numbers (ATINs and ITINs) do not

qualify. A Social Security Number on a card that reads“Not Valid for Employment” does not qualify. A Social

Security Number on a card that reads “Valid for workonly with DHS (or INS) authorization” qualifies.

The taxpayer must be a U.S. citizen or resident alien

for the entire year. A nonresident alien can claim thecredit if married to a U.S. citizen or resident alien, and

the nonresident alien chooses to be treated as a residentfor the entire tax year by filing a joint return.

Filing status may not be Married Filing Separately.

The taxpayer may not be a qualifying child of

another taxpayer.

The taxpayer may not file a tax form relating to

foreign earned income.

The taxpayer’s investment income must be $3,500

or less.

Taxpayers Without Qualifying Children

Taxpayers who meet all the requirements and who donot have a qualifying child for the year, can claim EIC if

the following additional requirements are met • The taxpayer must be at least 25, but under age 65,

at the end of 2018.

If Married Filing Jointly, either taxpayer can meet the

age test.

The taxpayer cannot be the dependent of another


The taxpayer’s principal place of abode is in the

United States for more than half the year. Residence

• $3,000 ($6,000 for two or more qualifying persons).

• Qualified expenses incurred and paid during the year.

• Include expenses for care in 2018 that were paid before

2018. Reduce expenses by dependent care benefits excluded

from income.

• Taxpayer’s earned income.

• Spouse’s earned income.


Instead of taking the credit, taxpayers may be eligibleto exclude from income an amount up to $5,000 for dependentcare benefits received under an employer plan

Child and Dependent Care Expenses


Not Qualified

• Care outside the taxpayer’s home for

a qualifying person who regularly

spends at least eight hours each day

in the taxpayer’s home.

• Amounts paid for items other than

care (food and schooling) if they are

incidental to the care and cannot be

separated from the total cost.

• Before and after school care.

• Household services, including cooks,

maids, babysitters, or cleaners, if

services were partly for the care of a

qualifying person.

• Employment taxes, meals, and extra

lodging expenses for household


• Day camps and similar programs

even if they specialize in a particular


• Transportation provided by a

childcare provider to or from a place

that care is provided.

• Schooling for a child in kindergarten

or above. Clarification:

The IRS has confirmed that kindergarten

costs are educational

and do not qualify for the credit.

This includes costs paid for a full

day of kindergarten at a private

school in a district where public

schools have half-day classes.

Costs of pre-school do qualify

even if the programs have some

educational content.

• Cost of an overnight camp.

• Expenses reimbursed by a

state social service agency not

included in income.

• Child support payments.

• Transportation of the care

provider and transportation of a

qualifying person not provided by

a childcare provider

Adoption Credit

Credit and Exclusion Amount

A taxpayer can claim a credit of up to $13,810 (2018) and

also exclude up to $13,810 of employer-provided benefitsfrom income for expenses of adopting an eligible

child. The same qualifying expenses cannot be usedfor both. Limits apply to the total spent over all years

for each effort to adopt an eligible child. An attemptthat leads to adoption and any unsuccessful attempt to

adopt a different child is treated as one effort. Unmarriedpersons who adopt a child can divide each limit in any way they agree.

Qualified Expenses include Non Qualified Expenses include Expenses

• Adoption fees.

• Attorney fees.

• Court costs.

• Travel expenses, meals and

lodging, while away from home.

• Re-adoption in state court

• To adopt a spouse’s child.

• For surrogate parenting.

• Paid or reimbursed by employer,

governmental agency or other.

• Allowed as a credit or deduction

under another tax provision.

• Paid before 1997

Eligible Child

A child under age 18 or a person who is disabled physicallyor mentally incapable of self care.

Education Credits

American Opportunity Credit. Credit of up to $2,500per student for the first four years. 40% of the credit may

be refundable.Lifetime Learning Credit. Credit of 20% of the first$10,000 of qualified education expenses (maximum credit

is $2,000). No limit on the number of years the credit may be claimed.

Contact Us

There are many events that occur during the year that can affect

your tax situation. Preparation of your tax return involves summarizing

transactions and events that occurred during the prior

year. In most situations, treatment is firmly established at the

time the transaction occurs. However, negative tax effects can

be avoided by proper planning. Please contact us in advance

if you have questions about the tax effects of a transaction or

event, including the following:

• Pension or IRA distributions.

• Significant change in income or


• Job change.

• Marriage.

• Attainment of age 59½ or 70½.

• Sale or purchase of a business.

• Sale or purchase of a residence

or other real estate.

• Retirement.

• Notice from IRS or other

revenue department.

• Divorce or separation.

• Self-employment.

• Charitable contributions

of property in excess of