Sunday, December 29, 2013

The Basics of Child Tax Benefits

The cost of raising children steadily increases annually and can strain the family budget. After food, clothing, insurance and educational costs, your little bundle can easily cost you a bundle. Fortunately, there are a number of federal tax breaks to offset the cost of raising a child. One of the most popular and beneficial is the child tax credit.

The child tax credit allows you to claim a maximum of $1,000 per qualified child. And thanks to the American Taxpayer Relief Act enacted January 2013, this tax break is one of several family-friendly tax breaks that’ll be around for at least another five years.

The intent of the child tax credit is to assist middle and lower class income earners. Therefore, the amount of the child tax credit is gradually lowered based upon higher income levels. For some taxpayers, the child tax credit can reduce their federal income tax liability to zero, and any remaining or excess child tax credits might be refundable to the taxpayer. Technically, there’s no limit as to how many children can be claimed for a child tax credit; however, additional dependents could require the taxpayer to pay alternative minimum tax.

A taxpayer will be eligible for the child tax credit if all the following criteria are met:
  • The child is related to the taxpayer as a daughter, son, adopted child, stepchild, foster child, sister or brother or descendant such as a nephew, niece or grandchild.
  • The child was under the age of 17 at the end of the year (i.e. the child is 16 or younger.)
  • The child lived with the taxpayer for over half of the tax year.
  • The child provided under half of their own financial support.
  • The child is a U.S. citizen, or a dependent that is not a U.S. citizen but has lived in the U.S. and is a resident.
  • The child meets criteria as a dependent of the taxpayer as described above.
If in doubt, contact one of our certified tax professionals at or visit our location at 3275 Snapfinger Road, Lithonia, GA 30038.

Phaseouts and Income Limitations

Like other credits, the child tax credit is gradually reduced based upon taxpayer income. Reduction begins at the following levels:
  • $75,000 for head of household, single and qualifying widow/widower tax filers
  • $55,000 for married couples who are filing separately
The child tax credit is reduced by $50 for each $1,000 of income over these thresholds.

Forms and Reference Material

Most filers can calculate their child tax credit with a worksheet found within the Form 1040 instructions. Publication 972 discusses the child tax credit in greater detail, and Publication 17, Chapter 34 also provides information about the child tax credit. Use Schedule 8812 when calculating the refundable portion of the child tax credit or reporting dependents who have an Individual Taxpayer Identification Number instead of a Social Security number.
Taxpayers can claim the child tax credit using either Form 1040 or the shorter version Form 1040A.

Friday, December 27, 2013

Seamless Process

We are quickly approaching tax season, and we are excited to inform you of our new Seamless Process!  We have reached out to many of you with the intent of finding an easier and time effective way to better service you this tax season.

Our research found that most of you would like to have the ability to have your taxes done without the hassle of waiting in line, fighting through traffic to reach our location before the close of business, and most important to have the ability to get your taxes done from the comfort of your own home. So we developed the perfect process to allow you to do just that.

Our Seamless Process will allow you to send your w2’s via smartphone, email, or fax. 

·        Using a smartphone simply take a picture of your w2 and all necessary forms and text to your personal Magic Tax Consultant.

·        If sending via email, simply scan w2 and all necessary forms to your computer and email to please make sure to include the name of your Tax Consultant and any necessary notes needed to complete your taxes.

·         If faxing simply fax your forms to our fax number 404-585-4387 and make it to the attention of your tax consultant.

Easy, Simple and Seamlesswe will get back to you within 24 hours with your completed tax return.

And for those of you who enjoy our company as much as we enjoy yours, we will still have our doors open to you.

We look forward to making your tax season pleasant and profitable. Thank you for choosing Magic Tax Solutions!

The Magic Tax Family

P : 404-551-3008
F: 404-585-4387

Thursday, December 26, 2013

5 Tax Credits That Could Get You A Refund

A tax credit reduces the amount of tax you must pay. A refundable tax credit not only reduces the federal tax you owe, but also could result in a refund.

Here are five credits the IRS wants you to consider before filing your 2012 federal income tax return:
    1. The Earned Income Tax Credit is a refundable credit for people who work and don’t earn a lot of money. The maximum credit for 2012 returns is $5,891 for workers with three or more children. Eligibility is determined based on earnings, filing status and eligible children. Workers without children may be eligible for a smaller credit. If you worked and earned less than $50,270, you may still qualify for partial credit. Visit Magic Tax Solutions and speak to one of our tax professionals.

    2. The Child and Dependent Care Credit is for expenses you paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent. The care must enable you to work or look for work.
    3. The Child Tax Credit may apply to you if you have a qualifying child under age 17. The credit may help reduce your federal income tax by up to $1,000 for each qualifying child you claim on your return. You may be required to file the new Schedule 8812, Child Tax Credit, with your tax return to claim the credit.

    4. The Retirement Savings Contributions Credit (Saver’s Credit) helps low-to-moderate income workers save for retirement. You may qualify if your income is below a certain limit and you contribute to an IRA or a retirement plan at work. The credit is in addition to any other tax savings that apply to retirement plans.

    5. The American Opportunity Tax Credit helps offset some of the costs that you pay for higher education. The AOTC applies to the first four years of post-secondary education. The maximum credit is $2,500 per eligible student. Forty percent of the credit, up to $1,000, is refundable. You must file Form 8863, Education Credits, to claim it if you qualify.
Visit Magic Tax Solutions for a FREE quote on your tax return. We are located at 3275 Snapfinger Road, Lithonia, Georgia 30038. You can also visit our website at

Saturday, December 21, 2013

2014 Tax Season to Open Jan. 31; e-file Can Speed Refunds

According to the IRS website on December 18th, the Internal Revenue Service announced plans to open the 2014 filing season on Jan. 31 and encouraged taxpayers to use e-file as the fastest way to receive refunds.

The new opening date for individuals to file their 2013 tax returns will allow the IRS adequate time to program and test its tax processing systems. The annual process for updating IRS systems saw significant delays in October following the 16-day federal government closure.

“Our teams have been working hard throughout the fall to prepare for the upcoming tax season,” IRS Acting Commissioner Danny Werfel said. “The late January opening gives us enough time to get things right with our programming, testing and systems validation. It’s a complex process, and our bottom-line goal is to provide a smooth filing and refund process for the nation’s taxpayers.”

The government closure meant the IRS had to change the original opening date from Jan. 21 to Jan. 31, 2014. The 2014 date is one day later than the 2013 filing season opening, which started on Jan. 30, 2013, following January tax law changes made by Congress on Jan. 1 under the American Taxpayer Relief Act (ATRA). The extensive set of ATRA tax changes affected many 2012 tax returns, which led to the late January opening.

The IRS noted that several options are available to help taxpayers prepare for the 2014 tax season and get their refunds as easily as possible. New year-end tax planning information has been added to this week.

The October closure came during the peak period for preparing IRS systems for the 2014 filing season. Programming, testing and deployment of more than 50 IRS systems is needed to handle processing of nearly 150 million tax returns. Updating these core systems is a complex, year-round process with the majority of the work beginning in the fall of each year.

About 90 percent of IRS operations were closed during the shutdown, with some major work streams closed entirely during this period, putting the IRS nearly three weeks behind its tight timetable for being ready to start the 2014 filing season. There are additional training, programming and testing demands on IRS systems this year in order to provide additional refund fraud and identity theft detection and prevention.

Lithonia Location

Magic Tax Solutions is now only located at 3275 Snapfinger Road, Suite B in Lithonia, GA 30038. The Riverdale location is no longer open. We encourage all of our clients to contact us at our Lithonia location for the upcoming tax season.  We now offer a new streamlined process where you can send us your w2 and other tax related forms via text message, email or fax.

Revamped Magic Tax Website

Visit our new website at and see what we've done.

Saturday, February 9, 2013


Magic Tax Solutions has two locations to serve you. We are located at 6728 Hwy 85, Suite J in Riverdale, Georgia & at 3275 Snapfinger Road in Lithonia, Georgia.

Unlike other tax offices that will get you the minimum, Magic Tax Solution specializes in maximizing your return. Taxes can be complicated, Magic Tax makes it easy.

Magic Tax Dancer Gets Traffic Attention