Six Ways New Parents Can Save on Taxes

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If you had a baby recently, they are bringing you more than joy this year. They also bring in bundles of tax savings for you during tax season.

New Parents Tax Guide

Child-Tax-Credit-RefundWhen you become a parent, you get a ton of benefits. The more children you have the better the benefits become. Below are a few tax deductions and credits you want to take advantage of this tax season.

  1. Dependent Exemption – This exemption reduces your taxable income. This year you can expect $4,000 per child.
  2. Earned Income Tax Credit – Depending on your income, filing status, and family size, you may be able to get this refundable tax credit. If your credit amount exceeds your tax liability, you may be able to get some money back in the form of a refund. Working families have access to more than $3,000 per qualifying child.
  3. Child and Dependent Care Credit – If you have to pay for child care for your dependents you could claim up to 35% of the expenses with a cap of $3,000 for one qualifying dependent.
  4. Child Tax Credit – You may be eligible for the child tax credit, which reduces your taxes dollar for dollar. It can be used for children under 17 and is worth $1,000.
  5. Medical Expenses – If medical expenses are more than 10% of your AGI, you may be able to deduct them. You have to keep all of your receipts because checkups add up quickly.

Start a College Fund

College may seem like years away, but starting a college fund as early as possible is a smart move. Opening up a 529 is quick and easy. Many states offer tax breaks for 529 contributions.

Closing Thoughts

These tips will help your family’s finances out. If you do get a tax refund, it can go even further by using it to pay down debt or save it. Find out when the TurboTax release date is and get your taxes filed as soon as possible.

Turbo Tax provides you with step by step instructions to insure that you get every deduction and credit that you are eligible for. Turbo Tax insures that you get the largest refund possible. They even have a free tax refund calculator available that allows you to know the amount of money that you will be getting back. Their online filing services have the ability to import your W2 information into your tax return so you can avoid worrying about your forms being delivered via snail mail.

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