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Author: edcosoft Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124814  
Subject: Re: Child Tax Credit Date: 7/13/1999 8:22 PM
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Because of the new Child Tax Credit I actually receive more credit than
I owe in income tax.

Would it be to my advantage to report my investment income now when I
owe no taxes, instead of later when I may owe taxes?...

In some cases the Child Tax Credit can provide a tax refund if you can't use
it all to offset your income taxes. In other cases it will not and therefore be
lost. So, if you get a refund because of the credit the tax shelter logic still
holds. If not it may be more advantageous to generate taxable income, at
least upto the amount of unused credit available.

Hope this helps


Actually, the Child Tax Credit is a non-refunding Credit and never returns credit in excess of your normal income tax. It will not offset Self Employed Social Security, the AMT, SS on tip income, IRA penalty Taxes, nor Nanny Tax.
The ADDITIONAL Child Tax Credit, however, is a refunding tax and will offset all of these, and like the Earned Income Credit, might actually give you money back (a reverse income tax).
Obviously if you are getting credits in excess of your regular tax, and can't use them, shifting more income in to be taxed is to your advantage as it effectively won't be taxed. Ed
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