Having kids changes a lot of things (well, everything), taxes included. Even if your baby is born on December 31st, you can claim them in April for the 2016 last year. Read below to learn about tax changes for new parents, now and in the future.
Tax Changes for New Parents
Although under the current requirements to claim medical expenses, (10% of your AGI) it is difficult for most people to take the deduction, we’re sure that after several hours of labor, doctor’s visits, and more, you’ll probably reach it. Breast pumps and any lactation supplies count, too. Remember to keep receipts and itemize.
Claim Your Child as a Dependent
This is the first of many years you’ll be claiming your little bundle of joy as a dependent. Up to approximately $4,000 can be withheld from taxes each year. If you adopted your child, make sure they qualify as a dependent on irs.gov. Don’t forget to request a Social Security card as soon as possible! You’ll need all the SSN of all dependents to claim them.
Upgrade Your Filing Status
If you are unmarried and would have filed as single, you can now file as head of household. You’ll get a larger standard deduction, and be in a more favorable tax bracket.
Read Up on Future Tax Credits
Trust us, this is just the beginning. There’s the Child Tax Credit, the Additional Child Tax Credit, Earned Income Tax Credit, and the Child and Dependent Care Credit, all of which have their own requirements and exceptions, but we guarantee you’ll be utilizing some on your taxes in the coming years.
Taking Advantage of Tax Changes for New Parents
As you rev up for all of the life changes coming your way, don’t forget to thoroughly research and consult a tax professional on how to approach your taxes as a new parent.