Tax Preparation for New Parents

Calling all last-minute Mamas….You only have one week left to file your 2012 Federal Tax Return and 2012 Massachusetts State Tax Return  for tax year 2011! This year we were lucky enough to get a few extra days to file due to the Patriot’s Day Massachusetts state holiday, but time is quickly running out!

Tax Preparation for New ParentsAs a new mom, I’m always looking to save money, so this year we opted to use TurboTax to file our taxes instead of hiring a tax accountant. We were of course nervous…Who would we ask all our questions to? And how would we be sure we took advantage of all the child tax credits? Thankfully, our worries were quickly put to rest.

TurboTax has a great online community and free chat services, but we didn’t have to use those. Everything was spelled out in plain English as we advanced through the screens to file our taxes. But this blog isn’t about TurboTax (though the product was great). This blog is about making sure you squeeze every dollar you can out of Uncle Sam to claim all your child tax benefits!

Here are a few of the common credits and deductions you need to be aware of. Note: a credit is much better than a deduction because it reduces your tax bill dollar for dollar.

  1. Child and Dependent Care Credit: You may be eligible for this credit if you paid someone, while you worked, to care for your child. There are a few eligibility requirements, so be sure to review this credit carefully to determine if you qualify. The credit is also limited. You can claim up to $3,000 in expenses per dependent with a maximum of $6,000 in expenses for two or more dependents. Note: Expenses paid through an employer child care reimbursement account cannot also be used to generate the tax credit.
  2. Earned Income Credit: This credit isn’t specific to having a child, but it is higher for those with qualifying children.
  3. Child Tax Credit: You may be eligible for this $1,000 credit if you have children who are 16 or under. Again, there are limitations to this credit, especially if your income is too high.
  4. Adoption Credit: You may be eligible for this credit if you adopted a child, began adoption proceedings, or tried unsuccessfully to adopt a child during the year.

Before you can begin, remember to take out your child’s social security card. You’ll need his/her social security number to be able to claim them and to get started with filing your tax return.

Tax prep can be tricky, so be sure to review all the fine print for these credits and deductions. Every person’s situation is unique, and the list above is by no way meant to be exclusive or exhaustive. And I don’t pretend to be a tax account, so please contact a professional with questions! J

Need more time to file your taxes? You can file for an extension until October 15th!

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About Kaitlyn

I'm Gavin's Mama. I'm trying to master motherhood one baby step at a time...Gavin leads, I follow!

Comments

  1. Great information, I am going to share it with my network.

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