Knowing what taxpayers are eligible for when they become parents can keep them from paying more in taxes than they owe.
H&R Block advises new parents to make sure they claim all the tax breaks they are eligible to claim, which can help put money in their pockets to cover new expenses.
Following are some tax breaks taxpayers need to keep in mind as they file their 2013 tax returns. Child dependent exemptions – For tax year 2013, taxpayers may exclude $3,900 from their taxable income for each qualifying child or qualifying relative they claim as a dependent. Among other requirements, a dependent must be a U.S. citizen, U.S. resident, U.S. national, or a resident of Canada or Mexico.
Child Tax Credit – Generally, a taxpayer who has a qualifying child who is a U.S. citizen or resident and who is under age 17 at the end of the calendar year may claim the Child Tax Credit. This credit is worth up to $1,000 per dependent child.
Earned Income Tax Credit – The Earned Income Tax Credit can be worth up to $6,044 for 2013 depending on taxpayers’ filing status, income and how many qualifying children they have.
Dependent Care Credit – Generally, parents may be eligible to claim the Child and Dependent Care Credit if they work, or are looking for work, and have one or more children age 12 or younger in day care or cared for by a babysitter. The credit can be claimed for 20-35 percent of qualifying expenses for in-home caregivers, day care facilities and some day camps. The percentage that applies is based on the taxpayer’s income.
To make sure you understand your tax outlook and are able to make sound financial decisions, consider meeting with a tax professional to discuss your individual situation.
For information about filing an accurate tax return, contact Gregory Itenberg, tax advisor 2 and a registered tax return preparer. H&R Block office is located at 1680 NE Miami Gardens Dr., Miami Gardens. Call 305-940-5281 or visit www.hrblock.com.