March 17, 2014
There’s no disputing the fact that raising children today is a costly endeavor. However, the American Taxpayer Relief Act of 2012 (ATRA) has eased parents’ tax burden and put a few dollars back in their pockets with the Child Tax Credit, which ATRA made permanent. This tax credit can be worth as much as $1,000 per qualifying child depending upon a parent’s income.
Because it is a tax credit rather than a tax deduction, which simply reduces taxable income, the Child Tax Credit reduces a parent’s tax liability dollar for dollar with the amount of the allowable credit. However, the credit cannot be taken for more than the amount of tax owed to the IRS.
To see if you qualify for the Child Tax Credit, the IRS provides the following seven tests:
It is important to note that your filing status and income may reduce or eliminate the Child Tax Credit. If your modified adjusted gross income is more than $110,000 (married filing joint), $55,000 (married filing separately), or $75,000 (single, head of household) you cannot claim the credit.
If you qualify to claim the Child Tax Credit, you will need to file IRS Form 8812 with your income tax return. Please contact our office if you have any questions about this tax credit.
When the Small Business Administration (SBA) launched the Paycheck Protection Program (PPP) last year, the program’s stated objective was “to provide a direct incentive for small businesses to keep their workers on the payroll.” However, according to federal officials, the recently issued second round of funding has distributed only a small percentage of the $15 billion set aside for small businesses and low- to moderate-income “first-draw” borrowers.
While “under a blanket on a cold winter day” isn’t the worst place to work, it’s a good idea to regularly assess your remote working environment—especially if you don’t have a full home office setup—to decide if anything needs an adjustment or upgrade. Here are four important points to consider:
If your business sponsors a 401(k) plan, you might someday consider adding designated Roth contributions. Here are some factors to explore when deciding whether such a feature would make sense for your company and its employees.