What to do if Bush tax cuts expire
A tax bright spot for parents is the child tax credit.
Most moms and dads just claim a dependent youngster who is aged 16 or younger on their tax return and then deduct the $1,000 per child tax credit. Because this tax break is a credit, you get to subtract it, dollar-for-dollar, from the amount of tax owed. It could potentially zero out your tax bill.
That tax credit glow, however, will dim a bit on Jan. 1, 2011. On that day, it will drop from $1,000 to $500.
Unfortunately, there's not much you can do here. Your kids are your kids and the expiring tax law is law... for now.
But as with the marriage tax, Congress has long supported tax breaks for families. It even made the child tax credit refundable in some situations, meaning you could get some money back from the IRS even if you don't owe.
So look for the child tax credit to be on the shortlist of legislative to-do's this fall.