After entering the available numbers into TurboTax, I am beginning to fear that my tax refund will be smaller this year. After some comparisons with 2015, I found one major difference is the loss of the Child Tax Credit. Like most seniors, my son turned 17 in 2016, and is no longer eligible for the credit. The screenshot below is from Turbo Tax, and shows a red x by my son’s name and a green check by my daughter’s name. I added the grey boxes to block out the names of my children child and my older kid that used to be a child.
Losing a tax credit is rough, and worse than losing a tax deduction. The 1000$ tax credit results in 1000$ less tax due. On the other hand, a 1000$ deduction results in a 1000$ of income not taxed. If you are in the 25% tax bracket, the tax due is only lowered by 250$.
There are some good tax breaks once your kids enter the college years, but this is a strange gap, during my son’s senior year. My tax refund will be at least a grand shy of last year, and I haven’t even noticed the costs of raising my son getting any cheaper this year.