RALEIGH — Several new tax laws are in effect that could increase your refund or reduce the amount of tax you owe.
The big winners are families with children.
The Taxpayer Relief Act of 1997 lets families keep more of their earnings. But you will have to fill out more complicated tax forms to do it.
This year many parents may find the more kids they have, the more money they'll get back from the government.
"The good news is most, a lot of the tax law is benefiting taxpayers. [That] they're complicated is the negative," says Ben Micham, a Raleigh tax accountant and financial planner.
Micham knows how to wind his way through tax forms, but he says the less experienced may miss the new tax credits they are due.
Micham says thechild tax creditis located on line 43 of form 1040.
An additional worksheet reveals the income and age limits that apply, then returns $400 per child. For a family with three children, that's $1,200 back in the pockets of mom and dad.
"I'm happy. I've heard so much about, you know, assistance for sending kids to day care, things like that," says parent Danielle Moore. "But what about folks like us who quit their jobs so we could stay home with our kids? So it's good that anybody with a kid gets some assistance."
"I would very much welcome more of our income to spend the way we see fit for my children," says parent Jimmy Elder.
Next year the amount goes up to $500 per qualifying child.
State tax forms now include $60 per child in tax credit.
Micham says many may like the lump sum in a tax refund, but he advises clients to increase their withholding so each paycheck is bigger.
"It may be more wise to get it now and pretend like you never had it and invest it for some future goal," says Micham.
He also says keep an eye out for othernew tax creditsyou may qualify for.
There are twoeducation-relatedtax credits. The HOPE tax credit is for families with children in college and the new Lifetime Learning tax credit is for graduate or undergraduate study.
You can now deduct interest paid on student loans, and there's theRoth IRA. Do you have a question about your taxes? You can log on to WRAL OnLine for free tax advice on Tuesday, February 23. Ben Micham will be available to answer your questions from 1 to 2 p.m. Look for the chat icon on our homepage.