One of the most monumental experiences in your life will likely be having children. They have a way of changing everything. Not only will the way that you spend your time change, but there are going to be several changes to your taxes as well. Having a child can be hugely beneficial. Mark Dicus & Company is here to talk about some of the benefits you will be able to take advantage of on your taxes when you have a child.
Benefits of Having a Child During Tax Season
There are several different ways that having a child can be beneficial come tax season. Here are some of credits that you want to be sure to take advantage of:
– Child Tax Credit: One of the most well-known tax advantages of having a child is the child tax credit (CTC). This is a $2,000 credit that every child in your family will give you. It doesn’t matter what time of year it is when you have your baby, you can enjoy the full amount of the credit. It doesn’t change even if you have your baby the few days of the year.
– Earned Income Credit: The important thing to know about the earned income credit is that not everyone is going to be eligible for this credit. However, for low income filers, this can be a game changer. If you don’t have any dependents, your maximum income for single filers is $17,640 and $24,210 if you are filing jointly. However, when you have one dependent, it will jump up to $46,560 for a single filer and $53,120 for those filing jointly. It gives you a much better chance of being able to take advantage of this credit.
– Adoption Credit & Exclusion: If you adopted a child in the calendar year, you could be eligible for the adoption credit that is worth up to $15,950 per child. This can have a dramatic impact on your taxes.
– Dependent Care Flex Spending Account: It can be a huge adjustment to to get used to paying for childcare for a little one. The government helps with this burden by allowing parents to deposit money into an FSA account directly from their paycheck pretax. You will end up paying less in taxes overall at the end of the year when you take advantage of this.
– Filing as Head of Household: If you are an unmarried parent, it can be more beneficial to file your taxes as head of household rather than a single filer. Your child must live with you for more than half the year, you have to be unmarried for at least the whole calendar year, and have to pay for more than half of the child’s expenses.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you are in need of tax preparation services, you can turn to Mark Dicus & Company to make sure you’re taking advantage of all the credits available to you. Call us today!