Having children can get expensive. While they can bring you a lot of memories and laughs and good times, they are still going to do a number on your budget each month. Luckily, there are a few deductions that you are able to qualify for when you have children during tax time. This can help to save you some money either with reducing your tax bill or helping to provide you with a refund in the end.
Figuring out which deductions you can get while having children can be confusing. Your tax professional will be able to help you figure out which deductions are best for you and your family. Don’t try to figure out these deductions on your own. Hire a tax professional who will be able to help you out through this process.
Head of Household
If you are able to claim head of household on your tax return, you could get a deduction for your children. This usually happens if you are single and have children, married filing jointly, or are the spouse that is allowed to claim the children when married filing separately. Pretty much if you are allowed to claim the children on your tax return, you will be able to get head of household and get the deduction.
This deduction is a great way to save some money on your tax returns. You will be able to get up to $1000 per qualifying child each year when you are able to put them on the tax return. To get this deduction, you will simply need to put in the social security numbers of the children you would like to qualify for and be the head of household in your home and then you can save the money. Make sure to work with your tax professional in order to get them most out of this deductions.
529 College Savings Plan
College is expensive and it doesn’t look like the price of college is going to go down any time soon. By the time your children go to college, the prices could be ridiculous and they may choose to not go to college because of the high cost. But as a parent, you can get started early on helping them to save money for their college plan.
The 529 college savings plan is a good way to help out your child prepare for their college. You will be able to put some money back into an account, similar to your retirement account, which will earn money and grow over the years. There are two benefits to using this. The first one is that your child will have at least a little bit of money to help them out when it comes to paying for college.
The earlier you get started on one of these plans, the more money you can save back for your child. Starting when your child is young not only helps you to put back more contributions for the child by the time they go to college, but the compound interest is going to keep adding up to make the savings even bigger.
But the best benefit is how much you can save on your tax return. You are able to put your contributions into this account and then deduct them when it comes to tax time. This is a great way to prepare your children for their futures while also saving some money yourself during your tax season. If you are interested in getting this deduction, make sure to talk to your tax professional to get one of these accounts set up.
Childcare Deduction
At times, you are going to need to send your children to a daycare or another childcare facility. You may have to go to work while you help to support your family and need a safe and secure place for your children to go while you are gone. Or you may be searching for a job that you will use at some point and need a bit of peace and quiet while you are doing this. No matter which of these reasons, you could get a deduction for the cost of your childcare while you are at work or looking for work.
The type of childcare that you use is not important. As long as you are able to prove that you have made the payments for your childcare through the year and it was for time you were at work or looking for work, you will be able to qualify for this deduction to save some money on your tax bill.
If you would like to get this deduction, you need to make sure that you are keeping track of all your receipts through the year. Your daycare provider should provide you one of these receipts each month when you make a payment or you can use your bank statement to help out. While you won’t be able to get the full deduction back, you will be able to get some of the costs back and lower your tax bill.
When tax season comes up, there are a lot of different deductions that you can qualify for. These are great ways to lower the amount you owe on your tax bill. If you would like some help finding out all of the deductions that you can use, make sure to hire a tax professional in your area before getting started.
