If your child is born during the year, even as late as 11:59 p.m. on December 31, you can show the child as a dependent for the entire year. The Tax Cuts and Jobs Act of 2017 eliminated the dependency exemption but enhanced the credit. The credit for a dependent child under age 17 is $2,000.
The good news is you gain tax advantages by contributing to your employer’s flexible spending account to cover child care expenses, or you may qualify for a child care credit on your tax return. The bad news is that any investment income over $2,200 (2019) in your dependent child’s name is taxed at rates applicable to trusts and estates until age 24.
Once your child reaches age 13, you no longer qualify to take the child care credit. Eligibility is determined on a daily basis.
This is the last year your child qualifies you for the $2,000 child tax credit. The credit for dependent children over 16 is $500.
If you own a business, prior to your children turning 18, you can pay them to work for you and avoid paying Social Security and Medicare taxes on their wages. Once they reach age 18, you are required to withhold payroll taxes like any other employee.
At this age, dependent children are taxed at their own rates on investment income.
Children are no longer eligible for their parents' health insurance benefits.
Congratulations. Not only have you reached the half century mark, you can contribute an additional $1,000 to your IRA, bringing the contribution limit to $7,000, or an additional $6,000 to your 401(k) for a limitation of $25,000.
You and your covered spouse are eligible to make an additional $1,000 contribution to your HSA.
This is the magic age when you may take money from IRAs and retirement plans without incurring the additional 10% penalty for early distributions. There are exceptions to the penalties if you are younger, but this is the age when you may take penalty-free distributions for any reason.
Once you reach age 65, you qualify for a higher standard deduction. For tax purposes, you are considered to reach age 65 on the day before your 65th birthday. In addition, you are eligible for Medicare.
If you were born between 1943 and 1954, you've reached full retirement age for social security benefits at this age.
At this age, you are required to begin distributions from your traditional IRA. If you have a Roth IRA, this rule doesn’t apply. If you have a retirement plan with your employer, you are still working, and you do not own more than 5% of the company, you can delay distributions even if you reach age 70½. Beginning 2020, there is no age restriction on traditional IRA contributions.