5 things parents should check before filing federal taxes
With everybody rushing to sign, seal and deliver their returns, you will want to take a moment to review recent federal tax changes and perhaps save a few bucks in the process.
1. Increase in investment income amount. The amount of taxable investment income these children can have without it being subject to tax at the parent’s rate has increased to $1,800 for 2008.
2. Adoption Benefits increased. For 2008, the maximum adoption credit has increased to $11,650. Also, the maximum exclusion from income for benefits under your employer’s adoption assistance program has increased to $11,650. These amounts are phased out if your modified Adjusted Gross Income (AGI) is between $174,730 and $214,730. You cannot claim the credit or exclusion if your modified AGI is $214,730 or more.
3. Earned Income for additional children decreased. For 2008, the minimum earned income amount used to figure the additional child tax credit has decreased to $8,500.
4. You may be eligible for the Recovery Rebate Credit. This credit is similar to last year’s economic stimulus payment, except that your 2008 tax information is used to figure this credit. The max. credit is $600 ($1,200 if married filing jointly) plus $300 for each qualifying child.
You can take this credit only if:
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You did not get an economic stimulus payment, or
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Your economic stimulus payment was under$600 ($1,200 if married filing jointly in ’07), plus $300 for each qualifying child you had for 2008.
