As an accountant in Orlando, I always tell my clients, you do want to pay the lowest amounts possible in taxes, right? Well, if you have kids you are in for luck. Those cute little babies can help you in availing many tax breaks, and even if your kids have grown, then also you can enjoy several tax breaks. We will present you the details about some of them here, and about the rest, you can ask your chosen accountant in Orlando.
The IRS regards your kids as a dependant. From the day they are born until they turn 19 years of age, they will provide you a deduction of $3,900 per child from your taxable income. If your child is a full-time student, this age is extended to 24 years. And if you have divorced, you will be entitled to this exemption only if the child lives with you.
Child Tax Credit
The child tax credit deducts $1,000 from your taxable amount for each of your child until they turn 17 years of age. You can avail this deduction only if you meet a few regiments such as the fact that the child is your dependant and lives with you for at least six months. However, if you are married and file jointly with income levels above $110,000, you will not be able to avail this credit.
Medical Mileage Deduction
How many times did you have to take your child to a doctor these years? If the answer is many, you should avail this tax credit. Though you may not get any deductions on the medical bills, you can at least get one on the travelling expenses that are incurred. Like with most of the tax deductions out there, even this month has its limitations. It does not apply to a general appointment visits, but if your child is sick, you can get a deduction on the gas and parking.
Child and Dependent Care Credit
This tax break is applicable only if you have children under 13 years of age. If you paid for their medical care, you may be illegible four a deduction worth 20% to 35% of the total expenses. The maximum limit on this amount is $3,000 or $6,000 if you have more children.
Did you adopt a child last year? Great, you can get a tax credit of nearly $13,000. This will compensate for all the costs and attorney fees which you must have paid.
This is not exactly a tax credit, but if you save for your child’s education, you will not have to pay any taxes on this money. Just make sure that your contributions do not exceed the defined limits.
Tuition Fees Deduction
If your child is a college student, you get a deduction of $4,000 for their college expenses.
So take advantage of the above tax credits and pay reduced tax bills this year. If you have any queries, take help from your chosen accountant in Orlando.
The Pros and Cons of Fling a Tax Extension
So are you planning to file a tax extension this year? What is the reason? Not enough idea about taxes or just short of time? Filing an extension for taxes has both its pros and cons. This is so even if you have retired. So if you are thinking about a tax extension, heed onto our advice and discuss the matter with your chosen accountant in Orlando. Brief them about your situation, and he will give you a suggestion.
For right now, we will like to tell you that even filing a tax extension will not do you much good if you delay things. It may o may not make taxes easier for you, depending on how you handle the situation. We will talk about the advantages and disadvantages, but before that, let us discuss what a tax extension actually is.
There are so many people who believe that filing an extension means you have more time to pay your taxes. Unfortunately, this is not so, and the extra time is only for completing your paperwork. Even with the extension approved you will have to pay your taxes before the deadline, or at least pay some part of it.
If your extension is approved, you are granted more time till the 15h of October to finish all the pending tasks.
- After the 15th of April, the workload of every accountant in Orlando is significantly reduced, and they have more time to go through your form thoroughly. This means more accuracy and reduced chances of error.
- If your job is seasonal, filing a tax extension maybe a great choice for you because you will have free time, later on in the year to go through all your preparations. So for instance, if you are a teacher with a tight schedule in March and April, you will actually benefit yourself if you have more time to manage all the paperwork involved. Just make sure that you pay the taxes before the deadline.
- Filing a tax extension is not a lengthy process. As for the amount of taxes, which you have to pay, talk to your accountant in Orlando, and they will guide you more.
- An extension in taxes does not mean you have to go through an audit. The chances of this are just as low, as when there is no extension.
- The primary drawback of a tax extension is that you do not know for the sure the amount which you owe to the IRS. Despite this fact, you still have to pay this amount by April 15, and if you fail to do so, you will have to bear penalties and late fees. The late payment fees are 5% on the tax amount which you did not pay. As for the penalty, it is accrued from the 16th of April. The maximum limit on this is 25%.
- If the IRS owes you money, you will have to wait longer to get it. Until your paperwork is completed, and you have filed your forms, you cannot get a refund.
If you need more information about our Orlando accounting and tax services, please contact us at 407-502-2400. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years. Our Orlando accounting and tax firm has its main offices in Kissimmee, FL. Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, Clermont, Davenport, Hunters Creek, Lake Nona, Celebration, Winter Park, Windermere, Dr. Phillips, Maitland, Altamonte Springs, Winter Garden, Ocoee, Apopka, Belle Isle, Edgewood, and Oakland FL. Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin numbers, incorporations, and non profit 501c3 tax exempt.