Milestones happen throughout your lifetime: getting a driver\u2019s license, having a baby, buying your first house\u2026 the list goes on.<\/p>\n
While these events may be significant milestones, there are also some important birthdays that carry tax consequences. Here are a few major life milestones to keep in mind so there is no surprise come tax time!<\/p>\n
Child and Dependent Care Credit is no longer available<\/em><\/strong><\/p>\n The Child and Dependent Care Credit helps ease the burden of childcare expenses by providing a credit against your taxes of up to $1,050 for one child ($2,100 for two or more children). But once your child turns 13, you generally can no longer claim the credit. Child care expenses for your child, ages 13 or older, also no longer qualify for reimbursement under a dependent care flexible spending account (FSA), which allows you to save up to $5,000 pre-tax and use the funds for eligible expenses. Both the credit and the FSA are available for disabled older children and other dependents who live with you (such as parents) who require care while you work.<\/p>\n Child tax credit ends<\/em><\/strong><\/p>\n The credit of up to $2,000 for each qualifying child you claim as a dependent ends the year the child turns 17. (Your child\u2019s age on December 31 is used to determine eligibility.)<\/p>\n Kiddie Tax ends<\/em><\/strong><\/p>\n \u201cKiddie Tax\u201d means that your child\u2019s unearned income above $2,200 (for 2019) is taxed at trust rates. Once your child turns 19, or 24 if they are full-time students, Kiddie Tax ends and the unearned income is taxed at the child\u2019s (probably lower) tax rate. Unearned income may include dividends, interest, capital gain, unemployment benefits, some taxable scholarships, and survivor pensions.<\/p>\n Make catch-up contributions to retirement plans<\/em><\/strong><\/p>\n If eligible, you can contribute to your retirement plans each year, but once you turn 50, you can contribute an extra $6,000 to your 401(k) for a maximum contribution of $25,000 for 2019, or an extra $1,000 to your traditional or Roth individual retirement account (IRA) for a maximum contribution of $7,000 for 2019.<\/p>\n Make catch-up contributions to a health savings account (HSA)<\/em><\/strong><\/p>\n At 55, you can also make a catch-up contribution of an additional $1,000 to your HSA. Taxpayers are normally limited to contributing $3,500 for self-only plans or $7,000 for family plans for 2019.<\/p>\nAGE 17:<\/strong><\/h3>\n
AGES 19 – 24:<\/strong><\/h3>\n
LIFE MILESTONES THAT IMPACT YOU\u2026<\/strong><\/h2>\n
AGE 50:<\/strong><\/h3>\n
AGE 55:<\/strong><\/h3>\n
AGE 59\u00bd:<\/strong><\/h3>\n