2011 Tax Credits Parents Should Be Aware Of

Every year there are changes and updates the tax laws. 2011 is not different. One of the areas to pay special attention to this year is the area of tax credits available to parents. Adoption, childcare and education are three areas that provide special tax benefits to parents. Because of this, it is important to keep detailed receipts for any expenses that are related to these areas. Below are some of the credits for parents to take note of for 2011.

Adoption

Adoption expenses up to $13,170 are fully refundable, as long as the adoption is initiated in 2011 or before, and finalized before the end of 2012. Form 8839, Qualified Adoption Expenses, must be filed with your 2011 return, along with adoption documents as qualified by the IRS.

Child Tax Credit

If you have earned income of over $3,000.00 in the year, you qualify for the $1,000.00 per child tax credit, which will remain available through 2012.

Dependent Care Credit

Up to $6,000.00 dollars in tax credits for dependent care is available for parents of children under 13 years old, who work or are attending school. Don’t forget about the costs of summer day camps when adding up your dependent care expenses. The cost of day camps, where the child goes home to sleep at the end of each day are eligible to be applied towards this credit. $3,000.00 is annual limit for one child’s dependent care credit.

American Opportunity Tax Credit

The Hope Credit has been made available to a broader range of taxpayers, including many with higher incomes and those who owe no tax. A maximum of $2,500.00 per student is available for students attending post secondary schools.

Tuition and Fees Deduction

A spouse or dependent enrolled in an eligible postsecondary institution may deduct up to $4,000 paid for tuition and fees in 2011. This deduction can be claimed by both those using the standard deduction and those itemizing deductions.

Education Savings Accounts

Coverdell education savings accounts deduction limit expansion from $500.00 per year to $2,000.00 per year has been extended to include 2011.

Related posts:

1. 2011 Reduction in Self-Employment Tax