9 TAX BREAKS PARENTS SHOULD KNOW

Many moms and dads may not know they could qualify for thousands of dollars in deductions, exemptions, and credits. Here, the top ways you can save, according to the pros:

Claiming your child as a dependent allows you to deduct $4,000 of your income. ‘First things first, make sure you get a Social Security number for your new child,’ says Vanessa Borges, Enrolled Agent, ‘You’ll need one to claim your child as a dependent on your tax return.’ And make sure you request one at the hospital, because it may be a hassle to get one later if you don’t.

TAKING ADVANTAGE OF THE DEPENDENCY EXEMPTION

Reduce your withholdings on your paycheck by filing a new W-4 at work. If you are unmarried, you may also be able to claim head of household status if you are paying for more than half of the cost of providing a home for your child.

UPDATING YOUR WITHHOLDINGSAND FILING STATUS

If your income is less than $110,000 for your household or $75,000 for a single head of household, you get a credit of $1,000 if your child, stepchild, or foster child is less than 17 years old.

CLAIMING YOUR $1,000 CHILD TAX CREDIT

This credit is dependent on your income and number of children. For example, as a family with three children, you would qualify for a $6,242 credit if you make $47,747 as a single filer or $53,267 if you file jointly with a spouse.

CLAIMING YOUR EARNED INCOME TAX CREDIT (EITC)

A tax expert points out that many parents who purchase their own insurance through the new marketplace may miss out on savings by not changing their information to include any new additions to their family. Additions to your household may help you get additional deductions.

UPDATING YOUR INFORMATION IN THE HEALTH-CARE MARKETPLACE

Don’t lose those receipts for prenatal visits, prescriptions, and other medical expenses. If they total more than 10 percent of your income, you can deduct what is left, and don’t forget your child’s health-care costs can be included in that as well.

KEEPING TRACK OF MEDICAL EXPENSES

Just because you didn’t give birth to your child doesn’t mean you didn’t incur a lot of costs by adding to your family. This is one of the biggest credits worth over $13,000, and if your child is special needs, you automatically qualify for the full amount.

BEARING IN MIND THE TAX CREDIT FOR ADOPTION

Depending on how much you make and spend on childcare, you could get some reimbursement ranging from 20–35 percent of costs. The catch: the childcare must be needed because the parent or parents are unable to care for the child due to work.

DEDUCTING CHILDCARE

Choosing a savings plan like a 529 state savings plan can help. One tax professional says, ‘In all 50 states, parents can get a deduction on their state return, and pay no tax on the gains.

SAVING FOR COLLEGE

To Learn MoreVisit

www.taxassistancegroup.orgor Call

(855) 549-7829

Source: Webb Battista, Morgan. “9 Tax Breaks Every Parent Needs To Know About.” Yahoo! Parenting. Yahoo! Inc., 1 November 2015. Web. 5 November 2015. <https://www.yahoo.com/parenting/9-tax-breaks-every-parent-needs-to-know-about-160803953.html>