4 Overlooked Tax Breaks for New Parents

Tax Breaks

4 Overlooked Tax Breaks for New Parents

Kids can score you valuable credits and deductions on your tax return.

Got a new bundle of joy in your household? Here are opportunities to cut your tax bill as you grow your family.

See Also: 17 Reasons the IRS Will Audit Your Tax Return

1. Dependency Exemption

Claiming your son or daughter as a dependent will shelter $4,050 of your income from tax in 2016 and 2017.

2. Child Tax Credit

A new baby also delivers a $1,000 child tax credit, and this is a gift that keeps on giving every year until your dependent child turns 17.

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3. Head of Household Filing Status

If you're single, having a child may allow you to file as a head of household rather than using the single filing status. That would give you a bigger standard deduction and more advantageous tax brackets.

4. Adoption Credit

The credit will reimburse you for up to $13,460 in expenses for a 2016 adoption.

Read more about ways parents can lower their tax bills.

See Also: 23 Most Overlooked Tax Deductions