Remember, if your child turned age 17 in 2017, you're no longer eligible for the credit. The threshold is $55,000 for a married individual filing separately and $75,000 for someone filing a single 2017 return.įor each $1,000 of income above the threshold, your available child tax credit is reduced by $50. You might not get the full credit or even a partial credit, for example, if your income is $110,000 or higher on a married filing jointly return. So what? Unless you meet the requirements for the child tax credit, you're not getting a bigger tax refund for 2017 with this one.Īll families don't automatically qualify for the child tax credit, which amounts to up to $1,000 per child under age 17 on the 2017 tax returns. Yes, you could have two toddlers or even a couple kids in high school running around the house. 2. I've got kids, so why don't I qualify for a child tax credit? So it might be helpful for some to take time to consider your filing status. "None of them is paying down more debt due to this technique." They understand the increase in taxes due to higher tax brackets and the loss of key deductions, such as the student loan interest deduction." "They do the math and determine that the increase in income taxes is less than the increase in mandated loan payments, if they file jointly," Smith said. And some clients will choose the "married filing separately" status - even if it triggers a higher tax bill. Smith said he runs the numbers through his tax software to see the tax ramifications of filing married jointly or separately. But the Revised Pay-As-You-Earn Repayment plan does not and would count both spouse's income even if you file separately. The Income-Based Repayment and the Pay-As-You-Earn Repayment plans allow for smaller monthly payments based on separate income, if you file married filing separately. But filing separately from your spouse can lead to a smaller income for the calculation.Ĭheck the type of repayment plan you have. "Their student loan income repayment plans are all determined, annually, based on their prior year adjusted gross income."įiling taxes jointly with your spouse means that your combined income is used when calculating monthly student loan payments under an income-driven repayment plan. He has several married clients who are working professionals with post-graduate student loan debt, including doctors and attorneys, who are filing separately. "It took a bit for me to wrap my brain around this approach," said George W. Select married filing separately, for example, and you'd miss out on the student loan interest deduction worth up to $2,500 and other breaks, like the child care credit and the earned income credit, too.īut some married millennials, oddly enough, are choosing to file separately simply because they want smaller student loan payments each month. But not always.įederal tax rates tend to be lower for couples who file jointly and you keep valuable tax deductions and credits that you wouldn't be able to take if you filed separately, according to TurboTax Live experts. Many times, filing jointly is the way to go. We got married - should we file jointly or separately? Here's a look at some popular tax questions and answers. Some of the most frequently asked tax questions center on being a parent, owning a home, getting married and the like, according to research by TurboTax Live, which connects taxpayers online to certified public accountants and enrolled agents to address questions. Of course, figuring out what tax deductions and credits actually apply to you has its own set of challenges. Even young couples who are juggling student loan payments can crack into some tax strategies that can work. Just look at all those opportunities to tap into money-saving breaks on your tax return. The super-sized spending years of raising little kids and paying big mortgages can turn into a financial advantage come April. Watch Video: Is your tax return at risk for ID theft?
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