taxes

What to do if Bush tax cuts expire

Child credit cut in half
Next
6 of 9
Back
Child credit cut in half

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.


 

 

advertisement

Show Bankrate's community sharing policy
          Connect with us
REFINANCE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed refi 4.17%  0.11 4.06%
15 year fixed refi 3.21%  0.12 3.09%
10 year fixed refi 3.26%  0.15 3.11%
 
View Rates in your area Next
Product Rate Change Last week
30K FICO-based HELOC 4.67%  0.35 4.32%
50K FICO-based HELOC 4.04%  0.05 3.99%
100K FICO-based HELOC 3.88%  0.05 3.83%
 
View Rates in your area Next
Product Rate Change Last week
60 month used car loan 2.99%  0.19 2.80%
48 month used car loan 2.91%  0.09 3.00%
60 month new car loan 3.07%  0.10 3.17%
 
View Rates in your area Next
Product Rate Change Last week
1 Year CD 0.99%  0.01 0.98%
2 Year CD 1.20%  0.01 1.19%
5 Year CD 1.82% --0.00 1.82%
 
View Rates in your area Next
Product Rate Change Last week
Balance Transfer Cards 15.80% --0.00 15.80%
Cash Back Cards 16.42% --0.00 16.42%
Low Interest Cards 11.09% --0.00 11.09%
 
Next
advertisement
WEEKLY TAX TIP NEWSLETTER

Our tax expert Kay Bell provides resourceful tips and advice to help you stay prepared for filing.

advertisement

Connect with us