8 Tax Breaks Parents Must Know About
Kids are certainly expensive. In 2014, it was estimated that the cost of raising a child until 18 years old is $240,000. That’s before you factor in college costs and that many kids are living at home past 18.
Fortunately, come tax time (around now), we have some ways to reduce our Adjusted Gross Incomes (so our tax burden is lower) and expand our refunds. Here are some tax benefits you need to be aware of.
The child tax credit – Parents can claim $1,000 per child in their household who is 17 years old or younger. This is only applicable to families that make less than $110,000 (or $75,000 for single families).
2. Medical expense deductions – If you spent more than 7.5% of your household’s Adjusted Gross Income on medical bills, you can deduct these expenses from your taxes. This includes medical bills that most people don’t expect, like dental bills, physical/occupational therapy, and prescriptions. (But it does NOT include your health insurance premiums).
3. College saving plans – A 529 isn’t just great for kids; it’s a good way to reduce your tax burden too. Anything you contribute to one of these accounts can be claimed as a deduction.
4. Earned income tax credit – This credit is for families who made less than $47,000 that have a qualifying child. It scales with the number of children you have. Many families who qualify for this fail to claim it, so make sure you look into it.
5. American opportunity education credit – If you’re providing financial support to a child in college, you can write some of that off your taxes. It accounts for $2,500 per student for books, supplies, tuition, etc. It’s available for single parents who make up to $80,000 and couples who make up to $160,000.
6. Adoption credit – If you adopted a child, you can take about $13,000 off your income. Be careful, though, because it’s not always clear when an adoption was “finalized.” Make sure you check your paperwork to be sure it happened in that correct tax year.
7. Dependent exemption – A single person can claim one exemption. A married person can claim two. When you have kids, you get an exemption for each. This exemption is worth about a $4,000 deduction for each child.
8. Child-care deduction – If you put your kids in some sort of child-care, you can deduce some of those costs off your taxes. It’s based on your income, but usually comes out to between $600 and $1,000 for each child. If your child-care provider is licensed, this could be as much as 35% of the cost. (If your employer offers it, you can also contribute to a flexible spending account that isn’t taxed, but you have to pick the deduction OR the FSA).
Written by Stephanie Parker from Sleepingbaby.com, inventors of the Zipadee-Zip
The motto for Sleeping Baby, makers of the Zipadee-Zip, is: "Inspiring Dreams One Night at A time," and that, in a nutshell, is how it all started…with one little dream that has since become the Parker family's reality. When Brett and Stephanie Parker's daughter, Charlotte, was born, the feeling that welled up inside of them was indescribable; they never realized until first looking into those baby blues of hers that they were even capable of that kind of love.
When it was time to transition baby from swaddling, the Parkers tried every sleep sack on the market and everyswaddle weaning trick they could find for nearly two weeks and nothing worked to get baby Charlotte to fall and stay asleep.
Stephanie became determined to restore sleep and sanity to their household and set out to find a solution that would soothe Charlotte's startle reflex and provide her the cozy womb-like environment she loved so much but still give her the freedom to roll over and wiggle around in her crib safely. Out of sheer desperation and exhaustion, the Zipadee-Zip was born. The first Zipadee-Zip(R) Stephanie put together on her little sewing machine worked like magic!
To date tens of thousands of Zipadee-Zips have been sold and all from word-of-mouth marketing. It is so rewarding for the Parkers to see other parents and babies getting the sleep they both need and deserve!
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