“Children are a heritage from the Lord, offspring a reward from him.” Psalm 127:3
Children are indeed a gift from the Lord. To offset some of the financial costs of raising them, the new tax law may be able to help. Enacted at the end of 2017 this law provides a great tax benefit to many homeschool families. Below I highlight the change in the law from 2017 to 2018 and three ways you can utilize the potential tax savings.
Law in 2017
In 2017, the child tax credit let you reduce your federal income tax bill by up to $1,000 for each qualifying child under the age of 17 you claim as a dependent. The child must be your daughter, son, foster child or adopted child but can also be a grandchild or descendant of one of your siblings. You were able to claim an exemption of $4,050 per person and the standard deduction was $12,700.
The income limit for married people filing a joint return was $110,000 of modified adjusted gross income. If you made less, you would receive the full credit. If you made more, the credit would begin to phase out by $50 less in credit for every $1k over the $110,000.
Joe and Rhonda have five children. Their modified adjusted gross income (MAGI) is $120,000. They have $17,000 of deductions and $28,350 (7 people x $4050) of exemptions dropping their taxable income to $74,650. They owe $14,401 of federal tax. Since they are over the $110,000 MAGI limit, their child tax credit is phased down to $500/child for a total credit of $2500 dropping their federal tax bill to $11,901.
Law in 2018
The new law increased the child tax credit to $2,000 for each qualifying child, eliminated personal exemptions, increased the standard deduction for married filing jointly to $24,000, lowered the tax brackets for some and increased the income threshold to receive full benefit of the credit from $110k to $400k.
Let’s look at how Joe and Rhonda would do under the new law.
Let’s assume Joe and Rhonda make the same modified adjusted gross income in 2018 ($120,000). They now get the standard deduction of $24,000 but lose the personal exemptions which makes their taxable income $96,000 ($120,000-$24,000). They will owe $12,999 before applying the tax credit. Since they have 5 children, they pick up an additional $10,000 child tax credit (5 X $2000) which drops their federal tax bill to $2,999! This equates to $8,902 less in tax paid!
Three Ways to Utilize Tax Savings
- Build your emergency fund. Having 3-6 months of living expenses in a savings account is crucial for a solid financial foundation.
- Pay down debt. Use these savings to pay off/down credit cards, student loans, auto loans or your mortgage.
- Fund a Roth IRA/Convert IRA dollars to Roth. Roth IRA provides tax-free growth and if withdrawn after 59.5 it can all be withdrawn tax-free. Plus, Roth principal is available penalty-free for withdrawal. Withdrawal of earnings before 59.5 would be subject to a 10% penalty.
Depending on the specific situation the new child tax credit can provide a great opportunity to save, pay down debt or give more to God’s Kingdom!
Authored by Michael Pemberton, Certified Kingdom Advisor®, RICP®, Financial Advisor, of Strategic Stewardship.
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.
And make your plans to join us at Teach Them Diligently Conventions this spring because we’ll have a special track of sessions that are all about finances, money savings, and financial education.
For more great articles about teaching your children how to manage their money and more homeschooling information be sure to check out the Teach Them Diligently Blog.
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David and I have been blessed to be Christian Healthcare Ministries members for several years. Not only has it saved our family thousands of dollars, but we have enjoyed being informed about the needs of others that we can help with and pray for. Joining together with other believers to meet needs and lift up in prayer is a beautiful example of how the church was called to be… and I cannot recommend them highly enough. Please take a moment to learn how CHM could help your family– and seriously consider joining our family as Christian Healthcare Ministries members soon! (I promise you’ll be glad you did!)
Why CHM Exists
Founded in 1981, CHM is the original health cost sharing ministry for Christians. CHM isn’t an insurance company. Rather, we’re a group of thousands of Christians across the United States and around the world who share each other’s burdens in the area of healthcare costs. We also pray for and encourage one another.
Our mission is to glorify God, show Christian love and experience God’s presence as Christians share each other’s medical bills. As president and CEO Rev. Dr. Howard Russell often says, “If we’re not glorifying God through service to our members, CHM has no reason to exist. Biblically-inspired love and service is the beating heart of the ministry.”
CHM is a 501(c)(3) nonprofit organization and a Better Business Bureau Accredited Charity. The ministry has shared over $3.5 billion in members’ medical bills.
Why CHM Works
We believe that the Holy Spirit influencing the hearts of members is the key to CHM’s success. A CHM member’s faithfulness and giving—combined with the monthly financial giving of hundreds of thousands of member families—is the framework that makes medical bill sharing possible. CHM sharing is based on a spiritual covenant, not a legal contract.
Furthermore, members agree to abide by the ministry’s Guidelines (chministries.org/guidelines) and staff authorize medical bills according to the Guidelines to act in fairness to every member. Members also actively seek medical bill discounts, which in 2017 accounted for 43 percent of all eligible bills sent to CHM.
Who We Serve
Every Christian who lives by biblical principles (defined in the Guidelines and the member application) and agrees to abide by the CHM Guidelines can join the ministry. There are no restrictions based on age, weight, geographic location or health history. (Some sharing limitations apply for pre-existing condition).
What Members Have to Say
I’m forever grateful that my CHM family shared my medical expenses totaling $83,671. Now instead of thinking that Christian Healthcare Ministries sounds too good to be true, I can testify that it’s “that good and that true!” I love to share my CHM testimony and carry information with me so I can talk about and recommend the ministry any time I get the opportunity.
—Cheryl Anderson | Hudson, WI
We’re so thankful to be a part of a ministry that shares other Christians’ healthcare bills. I am amazed at how healthcare prices can be negotiated, and I often wonder what we would have done without CHM when we gave birth to our second child. Making our monthly financial gift to the ministry is easy and painless when we think about how we’re helping other people.
—Derek and Melissa Cladek | Tarpon Springs, FL
The most important thing I can share about our CHM experience is that we never had to panic and there was no drama. Everything flowed smoothly. We didn’t have to worry about how the medical bills would be paid because Christian Healthcare Ministries was there for us.
—Donald & Tracey Kiesling | Brady, TX
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Free Resource – The 14 Day Starter Bible Devotional for Homeschool Moms!
Focusing on the foundation of your homeschool provides a powerful anchor to direct your day and your school teaching to the Gospel. A short focus on the foundation at the beginning of your day will bear massive results.
- MINUTES A DAY.
Each entry can be read in minutes each day.
- FOCUS ON THE WORD.
It is amazing how other priorities fall in line when we get the foundation right each day. Starting with the correct priority will minimize distraction.
- KNOWN FOR THE HEART.
Teach Them Diligently is known for addressing the heart of discipleship in homeschooling. Let us help!
Choosing which college to attend will most likely be the biggest decision your son or daughter has made so far. It can be an overwhelming — but not impossible! — decision. In today’s post, Matt Dearden, Director of Admissions at Cedarville University, offers Five Words of Wisdom for walking through the college decision process with your son or daughter.
Five Words of Wisdom
#1 Begin with the end in mind.
What kind of person do you want your son or daughter to be after four years of college? Identify the characteristics that you want to define your son or daughter — academically, socially, and spiritually — and then choose a university that is most likely to produce the results you desire.
#2 Recognize the significance of the college years from a developmental perspective.
Going to college is certainly about earning a degree, but that is likely not the most significant outcome. Students moving straight from high school to college will navigate the transition from adolescence to adulthood during their college years. Consider the following:
- Who will be there to guide your son or daughter when they are making decisions about what they believe and who they are becoming?
- Will these teachers and advisers share the core values you have been developing in your son or daughter for the last 18 years?
- Will your son or daughter be encouraged to grow deeper in their Christian faith?
#3 Take time to understand the God-endowed talents, gifts, and abilities that your son or daughter possesses.
Do you believe that God endows every image-bearer with a unique set of gifts, talents, and abilities for a specific purpose? If so, then it is important to take time to understand what that means in the life of your son or daughter. As parents we are tasked with nurturing those God-given talents — even during the college years. Help your student choose a major and a career that are a good fit for his or her talents and abilities. Choose a college that is committed to helping your son or daughter develop their gifts for their God-ordained purpose.
#4 Ask the right questions to improve your chances of choosing the right college.
Develop questions that will help you determine a university’s ability to produce your desired outcomes and its interest in developing your son or daughter’s unique gifts, talents, and abilities.
#5 Visit universities during the academic year when you can experience the unique personality of the school.
Sit in on classes, attend chapel, meet with students and faculty, and get a sense for what makes each school uniquely different.
We will be praying along with you this year as you work through this incredible, life-changing decision. Please don’t hesitate to contact us if we can help in any way!
1,000 Days of Life-Transformation
Watch the video below to hear Cedarville’s president, Dr. Thomas White, speak about his passion for equipping students for Gospel impact during their approximately 1,000 days of our campus.
Pursue Your Passion.
Cedarville University will equip you with the in-demand skills and biblical knowledge you need to be a bold influence for the Gospel in your workplace, home, and church. We’ll help you discover and pursue God’s call on your life. When you graduate, you’ll be ready to go boldly wherever He leads.
What Makes Cedarville Unique?
- Biblical worldview built into every course.
- Comprehensive academics, including liberal arts and the professions.
- Dynamic daily chapel, plus local and global ministry opportunities.
- First-rate career preparation – 97% job placement rate.
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I’m pretty sure that when we reach the end of our homeschool journey, David and I will look back to see that God taught us even more than He taught our children. He has refined us, shown us our weaknesses and how to rely on Him for strength, given us a clearer vision for our calling, given us a deeper passion for discipleship, and so much more.
Sometimes, though, in the thick of things, I lose sight of the amazing things God is doing in my own life—and in David’s– through this exercise. It’s easy to get so focused on the day to day that we don’t see the miraculous work of the Lord all around us, in us, and through us.
I hope this week’s video is an encouragement to you to be on the lookout for those amazing, miraculous things in your own life and family!!
Click here to watch this week’s video on Teach Them Diligently 365.
If you’re not already a member of TTD365, I invite you to join us there! In addition to access to great content each week and thousands of audio workshops from historic Teach Them Diligently events, you will also become part of a community of homeschool families who are committed to growing together and encouraging one another year round! We have monthly virtual meet-ups, a private Facebook group, and onsite gatherings at Teach Them Diligently events to reinforce that community. Get more details about a membership in Teach Them Diligently 365 here.
The post Celebrating Amazing Lessons for Homeschool Moms And Dads appeared first on Teach Them Diligently 365.