5 Tax Savings for Parents

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The deadline to file your tax return is coming up fast, but that doesn’t mean you can’t make sure you’re getting all the tax benefits you deserve. For busy parents who are crunched for time, I’ve compiled a list of tax credits and exemptions that can help as you prepare your taxes and reduce your tax obligations.

Dependent Exemption

The first way you can save on your taxes as a parent is taking the dependent exemption. The exemption is worth $3,900 per child when you file your taxes. This is a wonderful way to reduce your taxable income for the year. Please keep in mind that you must provide the correct social security number for your dependents when you claim them on your tax return.

Child and Dependent Care Credit

Did you send your child (under 13) to day care last year? If so, you may use this tax credit to claim up to $1,050 of child care related expenses you paid for one qualifying dependent or up to $2,100 for two or more dependents. To qualify both parents, if married filing jointly, must have earned income from wages, salaries, tips, and other taxable employee compensation or net earnings from self-employment income unless one spouse is a full time student or physically and mentally incapable of taking care of themselves.

Earned Income Tax Credit

Earned income tax credit can be a tremendous benefit for parents as it is a refundable tax credit. The maximum credit for 2013 for a family with 3 or more qualifying children is $6,044. To qualify for the credit, you must meet the income requirement (if your family’s modified adjusted gross income is a little under $52,000 you may want to look into it more).

Child Tax Credit

This credit is different than the Child and Dependent Care Credit. This non refundable credit can be worth $1,000 for each qualifying child (such as your son, daughter, stepchild, foster child) you claim under age 17. This can help to reduce or eliminate the taxes you owe for the year. Currently your tax credit is phased out at modified adjusted gross income over $75,000 for single and $110,000 married filing jointly.

Adoption Credit

Adoption is a wonderful way to expand your family, but the costs can be considerable. Fortunately, the federal government allows families to use a tax credit which is worth up to $12,970. Qualifying expenses include adoption, attorney, and court fees. You can also claim traveling expenses if they are directly related to the adoption.

Don’t worry about knowing all of these tax credits.  TurboTax will ask you simple questions about you and give you every tax deduction and credit you deserve.

Thoughts on Saving on Your Taxes

I hope these tips help you as finish up your taxes. Are you taking advantage of all the tax credits you’re entitled to as a parent? What are some ways you managed to save on child related expenses?

Comments (10) Leave your comment

  1. I’ve heard the IRS gives you less credit for children that are older…has anyone heard this?? I have four children, will probably be paying taxes back. However, while doing my taxes, I noticed, turbotax system automatically decided which children to use for the EIC.

    1. To be more clear, my oldest daughter is 17.. I would like to use my younger children to see if it will give me more deductions. I wonder what will happen if I dont put my oldest daughter on my taxes this year?? ughhh..

  2. These worthless tax tips are not viable for working people since the government limitations hit married couples that work not only with additional taxes versus single couples who live together but add additional limitations on their ability to use any and all of these junky deductions.

    1. I agree even for singles. If you don’t own property and just get standard deduction then this is just good for poorer people as they get a refund whether they worked or not. How does someone making $12,000 get a huge refund who paid no taxes and yet I paid $1,200 month in taxes and owe each year as a single mom yet still live in Low income housing. Doesn’t make sense. I also pay over $600 for insurance as my co pay. Still no refund and have $200,000 in student loans. Quit and give back to those who actually pay taxes.

      1. I absolutely and totally agree with you 2000%. I’m in the same boat can’t get anything back. I feel like I’m being penalized for working and working overtime and having a child in college having over 100 thousand dollars in college loans no EIC for me no money back single mom living with a relative trying to survive I can’t see above water anymore. Where is the help for people in my situation where it seems like everyone who gets the help get it all and all I’m doing is working helping them but I get kicked in the rear when I need help. Where is the justice in that.

  3. Is there a taxable earning ceiling or phase out of the credit? Is this in addition to a Dependent Care FSA that will be maxed out utilizing the full $5000 that is used to qualifying day care during the school year?

  4. I would like to know if Girl Scout Day Camp qualifies too, as I have 2 Girl Scouts. Wish I would’ve known at the beginning of summer! There’s always next year.

    1. You don’t need to know at the beginning of summer just at tax season. I did Boy Scout camp until my son was 13. Everything counts as care.

  5. What kind of day camp qualifies for the credit. I know of…. girl scout camp, boy scout camp, VBS… vacation bible school camp…. are there others…. do these qualify… do you have to have proof…

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