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.

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.

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.

Most Popular

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer
Coronavirus and Your Money

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer

The IRS has an online tool that lets you track the status of your second stimulus check.
January 18, 2021
The Recovery Rebate Credit: Get Your Full Stimulus Check Payment With This Tax Credit
Tax Breaks

The Recovery Rebate Credit: Get Your Full Stimulus Check Payment With This Tax Credit

If you didn't get a stimulus check, or you didn't get the full amount, you may be able to claim the recovery rebate credit on your 2020 tax return.
January 18, 2021
When Could We Get a Third Stimulus Check?
Coronavirus and Your Money

When Could We Get a Third Stimulus Check?

President-elect Joe Biden and others in Congress are pushing for a third-round of stimulus checks, but it might be a while before we get them.
January 18, 2021

Recommended

President Biden's Tax Plans for the Next Few Years
Politics

President Biden's Tax Plans for the Next Few Years

With control of both the House and Senate in Democratic hands, President Biden will be able to get more of his tax agenda through Congress. Here's wha…
January 20, 2021
How to Handle an IRS Audit of Your Tax Return
tax returns

How to Handle an IRS Audit of Your Tax Return

Don't panic! Keys to success include being well prepared, establishing credibility right from the start, and keeping your wits about you.
January 15, 2021
When Can You File Your Taxes This Year?
tax filing

When Can You File Your Taxes This Year?

If you're an early bird when it comes to filing your tax return, you'll have to wait a little longer this year before the IRS will accept your return.
January 15, 2021
12 IRS Audit Red Flags for Retirees
retirement

12 IRS Audit Red Flags for Retirees

Seniors Beware: Your actions can increase the chances of the IRS giving your tax return a closer look.
January 14, 2021