When you become a parent, you will quickly realize how little you know about the whole gig. Everything from care and feeding to what it means for your taxes. You want to make sure that you’re taking advantage of all the opportunities that you will have to lower your taxable income and save you money. There are some mistakes that parents often make that will leave money on the table when tax season is over. Mark Dicus & Company is here to talk about some of the mistakes that are often made by new parents so that you don’t make that mistake.
How Can I Avoid Tax Mistakes?
Following are some of the most common tax mistakes made by filers who are parents:
– Child Social Security Number: A big mistake some parents might make is to forget to get a social security number for their newborn. You need to make it a priority right after the birth of your child so that you have it when tax season comes around. Without it, you won’t be able to take advantage of the child tax credit.
– Childcare Provider Records: There are many parents that have their children in childcare or hire a nanny to help take care of their child. If this is the case for you, make sure that you keep records of all the money you spend on child care so that you can claim it using the child and dependent care tax credit. You can claim up to $3,000 for a single child and $6,000 for two or more qualifying dependents.
– Head of Household: If you are a single parent, you might be able to qualify to file as a head of household. This can lower your tax liability and save you money. You have to meet certain criteria , so make sure you meet them before trying to file this way.
– Earned Income Tax Credit: For low income tax payers, the earned income tax credit might be an option. The amount that you can claim depends on your gross income amount for the year, as well as how many children you have.
– Reporting Child’s Income: If you child is earning an income, you might be able to claim it on your tax return. It is important to remember that children who are required to file a tax return must report it on their earned income on their own return.
– Education Tax Breaks: There are several educational tax breaks that can reduce the financial burden of getting an education. There are tax breaks that can help you cover the cost of things like tuition and fees.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you have questions about what you need to make the most of your tax return, you can turn to Mark Dicus & Company to help prepare your taxes. We will make sure that you’re taking advantage of all deductions and credits that are available to you. Call us today!