5 Life Events That Taxes Can Help or Hurt
BOSTON (TheStreet) -- Last year held many tax breaks and credits intended to get consumers spending. Federal stimulus money meant an $8,000 credit for homebuyers and breaks for buying hybrid vehicles and fuel-efficient cars and appliances.
That was then. Following the end-of-year passage of the Tax Relief Act, many of those stimulus-related perks have disappeared.
Nevertheless, there are some moves, purchases and life events taxpayers can count on for tax benefits and incentives throughout 2011. There are also some items where the tax incentive -- or lack thereof -- is a mixed bag.
|Whether you're buying a house, getting married, raising a family or approaching any number of other life-changing moments, it's worth it to figure out the possible tax benefits.|
No one should necessarily walk down the aisle or start a family based solely on IRS guidelines. But tax incentives may help thaw cold feet. The American Recovery and Reinvestment Act of 2009 created a category of families with three or more children and increased the maximum benefit of the Earned Income Tax Credit for 2009 and 2010. The Tax Relief and Job Creation Act of 2010 extended these changes through 2012. The maximum credit for 2010 tax returns is $5,666 for workers with three or more qualifying children. Workers without qualifying children may be eligible for a smaller credit amount. The Recovery Act included an expansion of the EITC worth, on average, $600 in additional assistance to families with three or more children. The Child and Dependent Care Tax Credit provides a credit of between 20% and 35% or up to $3,000 ($6,000 for two or more children) of child care expenses for children under age 13 whose parents work or go to school.
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