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Tax breaks every parent should know

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    How much are your kids worth to the IRS?

  • Duration 3:32
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Well -- really -- is that having children is a blessing to your life but.

It could be a blessing to your tax obligation to.

Fox -- -- -- Levys is here to explain.

All right so the tax -- them -- number one is money for our dependence what do you mean.

Right so each each dependent is an exemption so let's start off -- -- money for dependent so.

Each child you take that child and that -- you can write off 3800 dollars for the year.

2012.

So -- we're gonna go through different ideas from.

Education but just right off the -- the IRS says hasn't suggested amount that you can multiply but the number of exemptions.

And -- -- from your income so.

And also the main thing Gretchen is set your filing the right -- married obviously a couple married that's a great way -- its file.

-- headed household if you are divorce it's a little tricky argue the head of the household for over six months are you the primary.

Caregiver and and and incurring -- -- the cost in which case now this child is your dependent if you're only one of you would be able -- only wanna be really be able to claim this for 3800 dollar are tax let's see number two -- the child tax credit what fat.

OK so this one I you get a thousand dollar credit per child and you know -- the days that your passing down the money so freely to the kids that's taxed so heavily we track you know we know that for a fact so.

Let's go with this one and getting in there and trying get -- thousand dollar tax credit is no forms -- thing.

Just put in for it if you have more than one child you get a form the 8812.

And it will come -- it'll compute -- one.

And and this he can even get a refund if you are pretty freeing clear taxes.

I take advantage of this next one tax -- number three which is daycare costs you can put aside.

Tax free money is that what you're talking about here well you get to ask for a four day care and we know day care is not cheap daycare is so costly as we all know as parents in this case.

You get 3000 dollars for each child under the age of thirteen.

For 6000 for two kids in pre -- so you shouldn't get in -- -- the child independent care credit.

And you should get an -- -- that I -- -- you're paying an astronomical amount for these.

These -- fees that you -- the daycare.

All right -- let's say number four.

Education expenses -- thinks somebody was calculating maybe my accountant.

That college could cost as much as 75.

80000 dollars a year by the time my kids get there current year period -- here accountants and I mean that is un believable so.

You should go ahead and there's a few things and you talk about.

Taxes that you can do is to be of American opportunity credit.

That's worth up to 2500 dollars and it's for the first four years of education -- the lifetime learning credit.

Which and by the way credits are great rather than deductions and such as credits cut your tax bill dollar for dollar we -- -- -- tuition as a deduction.

And of course mean you know that right -- down for the New York Stock Exchange and all behind your financials.

Don't forget that the 529 is actually which is humongous top -- broker you can put away -- -- -- -- pay taxes on it now.

But that money in the -- -- -- nine plan which is dedicated towards education.

It doesn't -- the taxes as it grows and you can put in a lot of money.

300000 dollars and not only for kids actually.

For adults to it is an -- and I just found out he can pass it down to the next generation too in case that child does not I'm not making it easy to pass anything to the next generation so freely so doing he can become great advice and thanks.

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