News flash: children are expensive. Diapers, sports equipment, childcare, school books and more. For parents, the year-round costs really add up. Tax season, however, is one time of the year when children may help you in the financial world. Several child tax benefits and others related to raising a family may help reduce the amount of taxes you owe.
Pay attention parents. Don’t overlook these important child tax benefits, deductions and credits:
- Dependents: In most cases, a parent can claim their child as a dependent and deduct $4,000 for each dependent. Income levels above certain limits will reduce this amount. See Publication 501.
- Child Tax Credit: For children under the age of 17, a maximum $1,000 credit may be available. See Schedule 8812 and Publication 972.
- Child and Dependent Care Credit: If the parent paid for care for one or more qualifying persons so they could work or look for work, credit may be available for dependent children under age 14. See Publication 503.
- Earned Income Tax Credit: Parents who worked but earned less than $53,267 last year may qualify for up to $6,242. Tax professionals need to be careful following due diligence requirements to avoid errors claiming the EITC. See Publication 596.
- Adoption Credit: Certain costs paid to adopt a child may qualify for a credit. See Form 8839.
- Education Tax Credits: Individuals may qualify for the American Opportunity Tax Credit or Lifetime Learning Credit even if they don’t owe any taxes. View this IRS page for more information.
- Student Loan Interest: Interest on a qualified student loan may be deductible even if you do not itemize deductions. See Publication 970.
- Self-employed Health Insurance Deduction: If the parent was self-employed and paid for insurance, premiums paid during the year may be deductible. This may include coverage costs for children under age 27. See Publication 535.
Let TaxSlayer help you maximize your refund with our deduction guide. Finish filing your taxes and get back to the joys of parenting.