- March 2025
- Enedina Gonzalez
For many families, multigenerational living isn't just a lifestyle choice—it’s a practical and financial decision. With multiple generations under one roof, families can share responsibilities, resources, and build stronger connections. Beyond the shared meals and priceless memories, multigenerational families can take advantage of tax benefits that help lighten financial burdens. As you prepare to file your 2024 taxes, make sure you’re not leaving money on the table! Here are some of the top deductions and credits that can benefit families living together.
1. Homeownership Perks: Deductible Expenses That Can Save You Money
Owning a home comes with significant expenses, but also valuable tax deductions that can benefit your family.- Mortgage Interest Deduction: If you have a mortgage, you can deduct the interest you paid throughout the year. Your lender should provide Form 1098, outlining the amount of interest you can claim.
- Property Tax Deduction: Homeowners can deduct up to $10,000 in property taxes ($5,000 if married and filing separately), including state and local taxes.
- Energy-Efficient Home Improvements: If you installed energy-efficient upgrades like solar panels or energy-efficient windows, you may qualify for tax credits that help offset the costs.
2. Tax Benefits for Parents and Caregivers
Raising children comes with many expenses, but tax credits can ease some of the financial responsibilities.- Child Tax Credit (CTC): If you have children under 17, you may qualify for up to $2,000 per qualifying child.
- Child and Dependent Care Credit: Families with young children in daycare or after-school care may be eligible for up to $3,000 in expenses for one child or up to $6,000 for two or more dependents.
- Earned Income Tax Credit (EITC): This credit benefits low- to moderate-income families, with a maximum credit of $7,830 for families with three or more children.
Education Tax Savings:
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American Opportunity Tax Credit (AOTC): Worth up to $2,500 per student for tuition and fees for the first four years of college.
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Lifetime Learning Credit: Provides up to $2,000 per tax return for higher education costs, even if your dependent only takes one class.
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Student Loan Interest Deduction: This Deduction lets you reduce your taxable income by up to $2,500 of interest paid on qualified education loans. Eligibility depends on your modified adjusted gross income.
3. Supporting Elderly Parents? Get Tax Breaks for Caregiving
If you provide financial support for an elderly parent or grandparent, you may be able to claim them as dependents and receive additional tax benefits.- Other Dependent Credit: You may qualify for a $500 credit for each qualifying non-child dependent, such as a parent or grandparent.
- Medical Expense Deduction: If you’ve helped cover medical bills for a dependent relative, you can deduct qualifying medical expenses that exceed 7.5% of your adjusted gross income.
- Have a taxable income of less than $4,700 for the year.
- Rely on you for more than half of their financial support.
4. Smart Financial Planning: Ensure You’re Withholding the Right Amount
Changes in household income, dependents, or homeownership status may impact your tax situation. To avoid surprises at tax time, check your W-4 withholdings with your employer. Adjusting your withholdings ensures you’re neither overpaying nor underpaying taxes throughout the year.
Make Your Tax Return Work for Your Family
Maximizing your tax refund means more money to invest in your family’s future. Whether it’s managing higher education expenses, covering medical expenses, or putting funds toward home improvements, these tax benefits can provide meaningful financial relief. Be sure to consult a tax professional or use a trusted tax software to ensure you claim every deduction and credit available. At Premier America Credit Union, we’re committed to helping our members make smart financial choices. From savings accounts to financial planning resources, we’re here to support your family’s journey to financial wellness.
Disclaimer: This blog post is for informational purposes only and is not intended to be financial advice or instructions on how to file your taxes for your specific financial situation. Every financial situation is unique, and tax laws can be complex and subject to change. We recommend consulting with a qualified tax professional to discuss your individual circumstances and ensure you’re making the best decisions for your financial future.