4. It sounds weird but…take advantage of your kids
A few years ago, all parents could receive money in two ways: taking advantage of the personal exemption and the Child Tax Credit. Now, they can only use the Child Tax Credit, which doubled in value from $1,000 to $2,000 each for every dependent child 16 years old or younger.
Fortunately for all parents, the Child Tax Credit is much more valuable than the personal exemption. Why? Because it is actually a credit, not a deduction. Meaning that the full dollar value is subtracted from your final tax bill, not just your taxable income. Plus, it is also a refundable credit, so if your credits are bigger than your tax bill, you can keep the change.
Also, if your kids are older than 16, you could only take advantage of the $500 tax credit for children up to 23 years old who are full-time students as well as $500 each for other “qualifying relatives” who live in the household, including elderly parents.
