Welcoming a new addition to the family is an exciting and joyous time, but it can also bring financial challenges. Fortunately, there are several tax breaks available to new parents that can help ease the burden. Here are some valuable tax tips for new parents to consider:
- Review Withholding Status:
- Use the IRS Withholding Estimator to check your withholding and adjust it accordingly.
- You can also schedule an appointment with us to review your W-4
- Update your Form W-4 with your employer to ensure the correct amount of tax is withheld from your paycheck.
- Explore Eligibility for Tax Credits and Deductions:
Earned Income Tax Credit (EITC):
- Assists low- to moderate-income families in reducing taxes owed or increasing their tax refund.
- Child Tax Credit
- Child and Dependent Care Credit:
- Available for those who paid for child or dependent care while they worked.
- Eligible for up to 35% of daycare expenses with certain limitations.
- Adoption Tax Credit:
- You can claim eligible adoption expenses for each adopted child.
- Applicable to international, domestic, private, and public foster care adoptions.
Raising a child is undoubtedly a rewarding experience, and these tax tips can help you maximize your savings, allowing you to focus on creating lasting memories with your growing family. Remember to stay informed about changes in tax laws and let us know of the new addition to ensure you’re making the most of available tax benefits.