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These child tax credits and deductions can mean a tax refund for you!

There are many money-saving tax credits and deductions that can reduce the tax burden on families with children. The Child Tax Credit, Child Care Credit and the Earned Income Credit can all mean tax savings for families with one or more children.  Remember, a tax credit is a dollar-for-dollar reduction of the taxes you owe.

Child Tax Credit

The maximum Child Tax Credit is $1,000 each qualifying child under 17.  Because this is a partially refundable tax credit, even taxpayers who do not owe taxes are eligible if they have earned at least $3,000 in 2010.  If you have four children, the credit can cut your tax bill up to $4,000.

Income Requirements: When income exceeds $110,000 (married filing jointly), $55,000 (married filing separately) and $75,000 (all others) the child tax credit begins to phase out.  If parents are divorced or separated, the parent who claims the child as a dependent is eligible to claim the child tax credit.  This is true even if the parent’s filing status is married filing separately.  The Child Tax Credit Table can help you determine if you are eligible for the full credit amount of $1,000.

To maximize the benefit of each credit, you must take the nonrefundable credits in a specific order.  (You must sometimes calculate other credits first to properly apply the child tax credit.)  You can complete your taxes online at home using H&R Block tax prep software that automatically identifies all the tax savings you are eligible for, and it guarantees you’ll get the maximum refund.

The Earned Income Credit can be worth up to $5,666 off your taxes

The Earned Income Credit (EIC) is a valuable credit for lower-income taxpayers who work.  It provides a tax credit for one child of up to $3,050 and a maximum of $5,666 for three or more children.  This Earned Income Credit Table for 2010 can help you determine how much you take off your taxes.  The EIC reduces the amount of tax you owe and may also give you a refund—it can mean money back to you even if you $0 in taxes!

Dependent Child Exemption

The $3,650 qualifying child exemption allows taxpayers to claim a dependent exemption for their child, stepchild, adopted child, eligible foster child, sibling or step-sibling, or a descendant of one of these.  Children must be under age 19 or under age 24 and a full-time student, and younger than the taxpayer, live with the taxpayer for more than half the year; and not provide more than 50% of their own support for the year.

Child and Dependent Care Credit

The tax credit for child and dependent care expenses allows taxpayers to claim a credit for expenses paid for the care of children under age 13.  There is a limit to the amount of qualifying expenses.  The credit can be up to 35% of your qualifying expenses, depending upon your adjusted gross income.

By H&R Block’s Leigh Mutert, CPA and hrblock.com Community Manager (Think you may have missed out on tax credits in past years? H&R Block will review your tax 2007-2010 tax returns to see if you should get money back. This is free at any H&R Block office through March 31st.)

In New York, Tuesday marked the beginning of the long awaited trial of hedge fund manager Raj Rajaratnam, who ran the $7 billion Galleon Group and whose personal wealth is estimated at $1.3 billion. He is being prosecuted by the SEC for insider trade deals. Rajaratnam is said to have made $45 million in illegal profits. He has denied the charges and is free on $100 million bond. If he is convicted he could go to prison for as long as 20 years. The SEC historically has been such a handmaiden of the finance business that it's hard to imagine anything serious coming out of its prosecutions, but one never knows.

Whatever happens to Rajaratnam, it  would be simple enough to prosecute many of the high rollers on first civil, then criminal charges, fining them millions of dollars and taking them out of circulation for up to 20 years.

"Contrary to prevailing propaganda, there is a fairly straightforward case that could be launched against the CEOs and CFOs of pretty much every US bank with major trading operation," writes Yves Smith in her popular Naked Capitalism blog. "I'll call them 'dealer banks' or 'Wall Street firms' to distinguish them from very big but largely traditional commercial banks.’’ She proceeds to lay out the case, the key points of which I have excerpted below:

Since Sarbanes Oxley became law in 2002, Sections 302, 404, and 906 of that act have required these executives to establish and maintain adequate systems of internal control within their companies. In addition, they must regularly test such controls to see that they are adequate and report their findings to shareholders (through SEC reports on Form 10-Q and 10-K) and their independent accountants. “Knowingly” making false section 906 certifications is subject to fines of up to $1 million and imprisonment of up to ten years; “willful” violators face fines of up to $5 million and jail time of up to 20 years.

• • • • •

At Daily Kos on this date in 2009:

It is difficult to muster any sympathy whatsoever for the goddamned banks. This is a crisis entirely of their own manufacture. Yes, the housing market went down -- which anyone with an ounce of sense could have predicted, and did. Any bank betting the entirety of its assets many-times-over on that not happening deserves to fail as spectacularly as possible, its corporate leadership condemned to no greater future responsibilities than bussing tables. ...

We are aware of Japan's "Lost Decade", a period of real estate collapse and economic stagnation. We have, though, been in our own Lost Decade since the turn of the millennium, and only now that the higher echelons of our society have found themselves in as unpalatable a situation as the rest of us have been in has anyone important deigned to notice. We have had a decade of doing nothing, and two decades of offshoring our every competence, leaving us to putter in our financial closets and declare ourselves kings of all we could see.

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