Becoming a parent is one of the most remarkable things that can happen to you during your lifetime, changing the way you live, your values, and sometimes your priorities in life. And while there are many more important things that you should take care of right when you have children, when you find the time, it is important that you learn the tax credits that new parents can claim so that you can reap the full tax benefits of starting a family. Here are three tax credits that new parents may be able to claim on their taxes.
The Child Tax Credit
The first tax credit that new parents may be able to claim is the child tax credit. The child tax credit is a simple tax credit that gives you a break for simply having a child, a couple of thousand dollars per child, with a higher tax break given for younger children than for older dependents. The Child Tax Credit is one that most families will qualify for assuming that you are making under $150000 annually, half that if you are filing singly, or $112,000 if filing as the head of household.
The Adoption Tax Credit
Another wonderful and helpful tax credit that new parents may be able to claim is the adoption tax credit. To help out parents who decide to adopt, the government also gives a big tax break for adopters. The tax credit can give you more than $14,000 for adopting a child. This credit can be used for your tax liability only, but unused credit rolls over for five years, giving you essentially free tax money from adopting. If you have adopted, you know that there are a lot of additional fees and costs that come with it, taking the adoption credit can help make it easier.
The Child and Dependent Care Credit
The final important tax credit that new parents may be able to claim is the child and dependent care credit. The child and dependent care credit is another credit you get to offset the costs of childcare. This can be especially beneficial for families where both parents work, requiring a lot of expensive care programs. The credit of a few thousand dollars (up to $8000 if you have multiple children) can make a big difference.
While there are far more important things than taxes to worry about when you have a new child, it is still something to think about. Make sure that you are taking the time to get your maximum refund. Learn more about these three credits and see what you may be eligible to claim now that you are a parent.
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