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Three smart ways for parents to reduce their taxes

On Behalf of | May 17, 2021 | blog |

As any parent will tell you, it can be quite costly to raise a child. Fortunately, there are several smart ways for parents in Connecticut to save money during tax time. With that in mind, here are several ways that parents can get a break when filing their taxes.

Child Tax Credit

One of the most well-known tax reduction strategies for parents is the Child Tax Credit. In 2021, the CTC is up to $3,600 for each child under 6 years old. For children over 6 and under 18, the CTC amount is up to $3,000. The exact amount of credit you can receive is based on your adjusted gross income.

Earned Income Tax Credit

It’s also possible for families making low to moderate incomes to get a tax break with the Earned Income Tax Credit. The amount of credit you’ll earn under the EITC gets calculated based on your household income from wages, tips and earnings from self-employment.

Child and Dependent Care Tax Credit

While they’re away from home, many parents pay for childcare services. If this is the case, you might qualify for the Child and Dependent Care Tax Credit. It’s important to note that this credit only applies to children under the age of 13 and gets based on your household income. Also, the maximum credit amount you can earn per child is $8,000.

As you can see, parents may get tax breaks in several different ways. If you would like more help preparing your taxes, it might be helpful to contact a tax planning attorney and ask about potentially reducing your tax expenses.

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