What Parents Need to Know for Filing Their Taxes

The IRS calls your little bundle of joy a dependent, and with good reason. Even before that baby arrives, you should be aware of how Uncle Sam will be her uncle as well. There will be some nice tax benefits in the years to come. Before that can happen, your new baby will need to have a Social Security number assigned. The good news is that most hospitals have the paperwork all ready for you, and a few days after you bring baby home, their social security card will arrive. Don’t worry, you’re not already planning for their retirement; you need this number to enter on your tax return, to claim your new dependent.

For 2012, an exemption is a deduction from your income of $3,800; if you are married and filing a joint return, you are entitled to an exemption for you, your spouse, and each of your children. The impact on your tax bill will depend on your marginal rate of course, but whatever the rate, your goal is to reduce that taxable income as best you can.

If you are a single parent that pays over half of your household expenses, having a child will allow you to file with the status “head of household” which results in an increase to your standard deduction to $8,700 from the regular single rate of $5,950.

The Child Tax Credit

The Child Tax Credit is a credit against your taxes (a dollar for dollar reduction of tax due, as compared to reducing taxable income) of as much as $1,000. To qualify for this credit, your child must be 16 or younger by the end of 2012, your legal dependent, and with few exceptions, must have lived with you more than half the year. This credit phases out for Modified Adjusted Gross Incomes above $75,000 for single filers or $110,000 for married filers filing a joint return. This credit was due to drop to $500, but was extended at the present $1,000 for five more years under the recently passed American Taxpayer Relief Act of 2012.

 

The Child Care Tax Credit

The Child Care Tax Credit is another credit you may qualify for. This credit is available for expenses of caring for your child who is under 13 to enable you to work or actively look for work. The credit itself ranges from 20-35% of your covered expenses, and depending on your tax rate, may not be as good a benefit to you as the Dependent Care Assistance Program.
The total expenses qualifying for the credit are capped at $3,000 (for one qualifying individual) or at $6,000 (for two or more qualifying individuals). The dollar limits may differ depending on the tax year in question.

The Dependent Care Assistance Program

The Dependent Care Assistance Program (DCAP) is an employer sponsored plan (meaning your company may not offer it) which allows a couple to withhold up to $5,000 pretax to be used for child care expenses during the year. This benefit has a “use it or lose it” provision, so you should plan ahead to accurately estimate your expenses. Similar to the Child Care Credit, this account applies to your dependent child under 13 for expenses to take care of them while you are working. Your employer’s benefits department will be able to provide a detailed list of the exact expenses that are covered. For full time day care, it’s easy to spend $5,000 a year.

The Flexible Spending Account

The Flexible Spending Account is a similar account to the DCAP above, the difference being that it’s used for non-reimbursed medical expenses. These include doctor co-pays, prescription costs, dental expenses, and a number of other eligible items. The limit in 2012 was $5,000 per family, and is reduced to $2,500 per family in 2013. Check with your benefit department to get the complete list of items covered. It’s important to note any remaining balance not spent by the end of the year, plus extension, if available, is lost. If you are new to the FSA, track your expenses this year, and consider signing up for 2014.

The Earned Income Credit

Last, the Earned Income Credit is another credit available to those parents with income up to $36,920 (single) or $42,130 (married filing joint). In 2012 the credit is worth $475 if you have no children and up to $5,891 if you have three or more children.
As you can see, your new bundle of joy comes with their own list of benefits on your tax return. The list may seem a bit intimidating, but your H&R Block At Home software or Tax Pro will be sure to use the credits and allowable deductions to minimize that tax bill.
The H & R Block office in Benton is open for business and ready to help — and if you bring a sack of groceries for the food pantry, we will deduct $20 from your tax preparation bill. We also honor our competitor’s coupons. Call us at 618-439-4641 to book your appointment. We are located at 101 West Main Street in Benton and are anxious to serve you! Our office hours are 9 am to 6 pm Monday through Friday, and 9 am to 5 pm on Saturday.

By Jim Muir

A group of local farmers and friends have established a fund for Josh Odom, a lifelong Franklin County resident who died Feb. 9.

Odom, 38, died at 8:40 a.m Saturday morning.  Odom is a lifelong Benton resident, a well-known area farmer and the son of Brad and Cindy Odom, of rural Benton.

The fund has been established at Peoples National Bank, in Benton, to help defray medical and other expenses during the lengthy illness.

Anybody wanting to make a contribution can do so at:

Peoples National Bank

208 Public Square

Benton, IL  62812

C/O Josh Odom Fund

Carterville — Chuck Hamilton is announcing his candidacy for the John A. Logan College board of trustees.

Hamilton has worked for nearly four decades in the field of education in both the public and private sectors.  His more than 37-year career spans vocational, academic, and special education experience.  Dr. Hamilton has worked in public schools at the middle and high schools levels; community colleges; and at the university level.  Hamilton’s education includes B.S. degrees in Administration of Justice and Special Education; M.S. degrees in Rehabilitation Administration and Education Administration; and a Th.D. in Theology. Hamilton is currently the Director at Tri-County Special Education Joint Agreement.

“One of the things I have learned in my career is the value of hard work and tenacity,” Hamilton  said, “I know that most candidates don’t start knocking on doors until later in the year, but I’m starting now to introduce myself to as many voters as possible.”

Hamilton plans to contact more than 5,000 Williamson, Jackson, and Perry County voters, shake as many hands as possible, make hundreds of phone calls to more than 1,000 residents, and send hundreds of personal cards to voters.

Election Day is Tuesday, April 9, 2013. You can learn more about C.W. “Chuck” Hamilton and his campaign by visiting www.facebook.com/cwhamiltonjalc.

For more information, contact C.W.”Chuck” Hamilton at (618) 967-7002.

As you know, the IRS did not begin accepting individual income tax returns until January 30th. But you can come into H&R Block in Benton to prepare your taxes now. The sooner you get your taxes done, the better your chances of receiving your refund as quickly as possible.

Confused about something? Here are answers to a few of the questions you’ve been asking.

I keep hearing that “e-file” won’t open until the 30th. What does that mean, exactly?

There are two ways the IRS accepts tax returns: paper file (your paper return is sent via snail mail) and through e-file (your tax return is submitted to the IRS electronically). The vast majority of taxpayers e-file — nearly all tax preparers use e-file, and many are now actually required by law to e-file. H&R Block in Benton will submit your tax return via e-file. So, what the ‘e-file opening date’ means is that the IRS did not begin processing any tax returns (no matter how you file) until January 30th.

So, how quickly will I receive my tax refund?

Since the IRS began accepting and processing tax returns on January 30th, 2013, you can expect up to 21 days for your return to be processed and your refund to be issued. Although you may have received a refund in a much quicker time frame in years past, we advise you to plan for a 21-day turnaround.

The IRS lists a few factors that affect how quickly you receive your refund:

Common errors can delay processing and extend refund timelines. Ensure your refund arrives as expected by submitting an error-free return. Use the correct Social Security or taxpayer identification numbers, address, and bank and routing numbers if electing direct deposit.

To balance taxpayer service, quick refunds and tax compliance, the IRS must review refunds to prevent fraudulent and erroneous refunds. These critical reviews can add time to refund processing, even for some legitimate tax returns.

The IRS balances customer service and tax compliance by reviewing tax returns to prevent fraudulent and erroneous refunds. These critical reviews could add time to refund processing, even for some legitimate returns.

The IRS may need time to fix a simple error, like a math error.

Refund timeframes can also be affected by such factors as bankruptcy, an open audit or a balance due on a related account such as a different tax year.

The IRS also periodically adjusts its technology systems during the filing season, which can also factor into short refund delays.

So what can I do now to ensure I get my refund as quickly as possible?

Come in and prepare your taxes as soon as possible. The faster you file your return, the better your chances of receiving your refund in February.
The status of your refund will be available on the IRS ‘Where’s My Refund’ page within 24 hours after the IRS has received your return. Keep in mind that calling H&R Block or the IRS will not do anything to speed the process of your receiving your refund; your best bet is to check on the IRS website for the most up-to-date information. Keep in mind that the date provided on ‘Where’s My Refund’ is not a guarantee; it may take up to five additional days for your financial institution to post the refund to your account (if you received direct deposit), or for mail delivery of a paper check.

Our offices are open for business and ready to help — and if you bring a sack of groceries for the food pantry, we will deduct $20 from your tax preparation bill. We also honor our competitor’s coupons. Call our office at 618-439-4641 to book your appointment. We are located at 101 West Main Street in Benton and are anxious to serve you!

Our office hours are 9 am to 6 pm Monday through Friday, and 9 am to 5 pm on Saturday.