A few tax wins for every generation of your family 👨‍👩‍👧‍👦

Hi,

The IRS has a way of treating a whole family as one big number – but the real savings usually hide in the details of who’s who, whether you’ve got little ones at home, are juggling careers and a mortgage, or are helping aging parents (or are the wise senior yourself!).

Let’s walk through it, generation by generation.

FOR THE KIDS 👶

The Child Tax Credit is now permanently set at $2,200 per qualifying child under 17 for 2026 – a dollar-for-dollar cut to your tax bill, with up to $1,700 refundable even if you owe nothing. One catch worth knowing: both the child and at least one parent now need a valid Social Security number (issued by your filing deadline, including extensions).

A couple of easy wins:

• If your child has earned income (a summer job, helping in the family business), they can open a Roth IRA – decades of tax-free growth from a tiny start.
• A 529 plan grows tax-free for education, and recent rules expanded what it can cover.

FOR THE PARENTS 👨‍👩‍👧 – and who actually counts as a “dependent”

This is the question we get most, so here’s the short version. There are two kinds of dependents you can claim:

• A qualifying child for CTC – under 17 at year-end, related to you (child, stepchild, foster child, sibling, or a descendant like a grandchild/niece/nephew), a U.S. citizen/national/resident alien, who lived with you in the U.S. more than half the year, didn’t cover more than half of their own support, and is claimed as your dependent (and didn’t file a joint return except to claim a refund).

You may still claim the $500 Credit for Other Dependents. It’s quietly one of the most overlooked credits out there:

• A qualifying relative – this includes children and other relatives. A child must be under 19, or under 24 if a full-time student, or any age if permanently disabled – who lived with you more than half the year and didn’t cover more than half of their own support.
• Aging parent – if you provide more than half of their support and their gross income is under $5,300 for 2026. Good news: their Social Security generally doesn’t count toward that limit, and a parent doesn’t have to live with you to qualify.

FOR THE SENIORS 👵

Here’s the part that catches people off guard: a big chunk of your Social Security can be taxed. Up to 85% of your benefits become taxable once your “combined income” passes $34,000 (single) or $44,000 (married filing jointly) – and because those thresholds haven’t been adjusted for inflation since the 1980s, more retirees get pulled in every single year. It’s a frustrating quirk of the law, but there are ways to soften the hit.

Two tips that genuinely move the needle:

• Watch your “combined income.” It’s your other income plus half of your benefits. Spreading IRA withdrawals across years – or doing Roth conversions before you start claiming Social Security – can keep you under the thresholds, since Roth withdrawals don’t count toward it.
• Give straight from your IRA. A Qualified Charitable Distribution (QCD) sends money directly from your IRA to a charity, counts toward your required minimum distribution, and never lands in your income – which can lower how much of your Social Security gets taxed.
• And don’t miss the new $6,000 senior bonus deduction (up to $12,000 for a couple) for anyone 65 or older, available through 2028. It stacks right on top of your standard deduction.

Every family’s mix is a little different, and these small decisions add up to real money over time. If you’d like us to look at your specific situation – just hit reply by Friday and we’ll set up a free 15-minute call. No pressure either way.

Sincerely,

—

George Dimov, CPA

Licensed and Insured

(833) 829-1120 toll free

(212) 994-8081 Fax

www.dimovtax.com