Last-chance tax breaks for parents and homeowners

Family sitting outside their home

(ARA) — Uncle Sam is handing out a few extra breaks to parents and homeowners on their 2011 and 2012 tax returns. Although the filing deadline is months away, some of these tax benefits require forward planning. Others may influence decisions you make now about child care, college and your home.

The easiest credit parents can claim is the Child Tax Credit, says Jessi Dolmage, spokesperson for TaxACT. "By simple virtue of being a parent, you can claim $1,000 for each eligible dependent on your 2011 and 2012 returns. Even better, you can receive cash back for the credit, as long as your earned income is over $3,000 and your tax liability is less than the credit."

Daycare can account for a big chunk of working parents' income. Fortunately, you can recoup some of those costs with the expanded Child and Dependent Care Credit in 2011 and 2012. The credit is worth between 20 and 35 percent of up to $3,000 of qualified expenses per child under the age of 13, or $6,000 for two or more children. The credit amount decreases as adjusted gross income increases.

Parents who initiate and finalize an adoption by the end of 2012 may qualify for the expanded Adoption Credit. For 2011, the credit is worth up to $13,170 and is refundable (like the Child Tax Credit). In 2012, the maximum amount changes to $12,170 and becomes non-refundable. Keep in mind the IRS requires adoption documents and Form 8839 to be mailed with your return. It takes 6 to 8 weeks for mailed returns to be processed, so select direct deposit rather than a check for the fastest refund.

College costs are higher than ever, but so are the available tax breaks. The refundable American Opportunity Credit, expanded Student Loan Interest Deduction and expanded Coverdell Education Savings Accounts contribution limit add up to $7,000 in savings on 2011 and 2012 federal returns. Plus, you can deduct up to $4,000 in tuition and fees from your 2011 income.

Dolmage also notes, "For the first time in three years, there won't be a homebuyer credit available on federal returns. However, homeowners can still save on taxes in other areas."

The Nonbusiness Energy Property Credit is worth up to $500 for insulation, exterior windows and doors, central air conditioners, water heaters and other improvements. Caps have been placed on furnaces, water boilers, windows, water heaters, air conditioners and biomass stoves. In addition, if you claimed the credit on your 2009 or 2010 returns, you must subtract the collective amount from the $500 available for 2011.

Investing in solar hot water property, geothermal heat pumps and wind property before Dec. 31, 2016, also has tax benefits. The nonrefundable Residential Energy Efficient Property Credit allows you to claim 30 percent of the expenditures, although certain improvements have caps.

Depending on your adjusted gross income, mortgage insurance premiums paid on a qualified mortgage can count toward your 2011 mortgage interest deduction.

Tax preparation software is helpful for navigating all tax situations, but especially those for parents and homeowners, reminds Dolmage. "The IRS has several requirements for each tax benefit and a very specific definition of dependents. Software guides you through the details and then calculates your maximum amount. Solutions like TaxACT also include features to help users navigate major life changes, which certainly include adoption and college."

Learn more about these and other tax breaks at www.irs.gov and www.taxact.com. Estimate your 2011 federal and state taxes for free as early as October with Preview Versions of TaxACT.

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Upcoming Tax Dates

March 2All businesses
File information returns (for example, Forms 1099) for certain payments you made during 2014.

March 2Farmers & fishermen
File your 2014 income tax return (Form 1040) and pay any tax due - Details

March 2Payers of gambling winnings.
File Form 1096 along with Copy A of all the Forms W2G you issued for 2014. If you file Forms W2G electronically, your due date for filing them with the IRS will be extended to March 31. The due date for giving the recipient these forms remains February 2.

March 2 All employers
File Form W3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W2 you issued for 2014. If you file Forms W2 electronically, your due date for filing them with the SSA will be extended to March 31. The due date for giving the recipient these forms remains February 2.

March 2 Large food and beverage establishment employers
File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to March 31.

March 2 Wagering tax
File Form 730 and pay the tax on wagers accepted during January.

March 2 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in January.

March 10 Employees who work for tips
If you received $20 or more in tips during February, report them to your employer - Details

March 11 Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the first 15 days of February.

March 13 Regular method taxes
Deposit the tax for the last 13 days of February.

March 16 Corporations
File a 2014 calendar year income tax return (Form 1120) and pay any tax due - Details

March 16 S Corporations
File a 2014 calendar year income tax return (Form 1120S) and pay any tax due - Details

March 16 S Corporation election
File Form 2553, Election by a Small Business Corporation, to elect to be treated as an S corporation beginning with calendar year 2015. If Form 2553 is filed late, S corporation treatment will begin with calendar year 2016.

March 16 Electing larger partnerships
Provide each partner with a copy of Schedule K1 (Form 1065B), Partner's Share of Income (Loss) From an Electing Large Partnership, or a substitute Schedule K1. This due date applies even if the partnership requests an extension of time to file the Form 1065B by filing Form 7004

March 16 Social security, Medicare, and withheld income tax
If the monthly deposit rule Page 6 Publication 509 (2015) applies, deposit the tax for payments in February.

March 16 Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in February.

March 25 Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the last 14 days of February.

March 27 Regular method taxes
Deposit the tax for the first 15 days of March.

March 31 Electronic filing of Forms W2
File copies of all the Forms W2 you issued for 2014. This due date applies only if you electronically file.

March 31 Electronic filing of Forms W2G
File copies of all the Forms W2G you issued for 2014. This due date applies only if you electronically file.

March 31 Electronic filing of Forms 8027
File Forms 8027 for 2014. This due date applies only if you electronically file.

March 31 Wagering tax
File Form 730 and pay the tax on wagers accepted during February.

March 31 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in February.

March 31 Electronic filing of Forms 1097, 1098, 1099, 3921, 3922, and W2G.
File Forms 1097, 1098, 1099, 3921, 3922, and W2G with the IRS. This due date applies only if you file electronically. Otherwise, see March 2. The due date for giving the recipient these forms generally remains February 2. View More Tax Dates