Getting A Tax Credit For Your Kids By: Richard Chapo As you know, raising a family is a full time job and can put stress on your finances. Fortunately, you can claim a tax credit to help cut your IRS bill if you have kids. Getting a Tax Credit for Your Kids With a tax deduction, you are reducing the total amount of adjusted gross income you have. For instance, if you earned $50,000 dollars in 2005 and take a $1,000 deduction for something, you’ll have to pay tax on $49,000 dollars in earnings. Put another way, the $1,000 tax deduction will save you a hundred dollars or so in the amount you have to send to the IRS. A tax credit is a beautiful thing. It is designed to reduce the amount of taxes you on a dollar for dollar basis. Taking our example above, you would not deduct a $1,000 tax credit from the $50,000 you earned. Instead, you would go to the tax tables and determine the amount of tax you owe on the $50,000. Let’s say the tax tables reveal you owe $9,000. You would reduce this amount by the $1,000 tax credit and pay $8,000 dollars to Uncle Same. Put another way, tax credits are tax deductions on steroids! If you are raising children, you may be able to claim a tax credit for each one. They must be under 17 at the end of the tax year, a U.S. citizen, your child and a dependent. Adopted children fit within the tax credit as do stepchildren and certain foster children. This tax credit, however, does have some limitation. The primary issue is something called the phase out. If you make more than a particular dollar figure, the tax credit is either reduced or eliminated depending upon your particular circumstances. The phase out start when your adjusted gross income exceeds the following amounts: 1. Married filing Jointly: $110,000 2. Married filing Separately: $55,000 3. All Other Designations: $75,000 It is important to keep in mind that this tax credit is not a profit center. If you owe the IRS $4,000, but can tax a tax credit for 5 children, you will not get $1,000 back from the IRS. Instead, you tax bill is simply canceled out. About the Author: Richard A. Chapo is with the tax site - www.businesstaxrecovery.com - providing information on taxes. Visit www.businesstaxrecovery.com/articles to read more business tax articles.

Inside Finance Getting A Home Equity Line Of Credit   Can we refinance with poor credit? Home equity lines of credit are revolving accounts with your home serving as security for the loan. When you get a home equity line of credit you are approved for a certain amount of credit. Smart With Credit Card   The Zero Percent (0%) APR Intro Rate Credit Card – So, you’ve been approached by a credit card representative offering you this type of credit card, have you? He made it all sound so simple and wonderful, didn’t he? Or maybe, you accidentally came across a credit card website and you found yourself mesmerized with the words zero percent. Things: Prepaid Debit Cards   The things we must know about prepaid debit card is been discussed in this article. Once you have your prepaid debit card “loaded” you can make arrangements with your bank to assign it a routing number so that you may use it just like a checking account. Another new use of prepaid debit cards come from the currency exchange companies, better known as remittance services. Sink Yourself Financially - 8 Ways   Let's discuss about finance tips. Failure to develop a good financial plan . No one would imagine going on vacation without planning for it. Yet when finances are concerned, many people don’t plan. A good financial plan can be the difference between comfortable living and struggling to get by. Tax Scams In The Year Of 2006   Year by year IRS issues a tax scams. The goal is to alert taxpayers to the lack of merit of certain strategies as well as letting everyone know the IRS will not accept them. The IRS has kicked out its annual list of highly dubious tax scams for 2006.