4 Things to Know About Your Taxes If You Had a Baby This Year
So, 2017 was kind of major: It’s the year you became a mom. But now, with the tax deadline in the near future (not to mention some looming tax changes), you still have a gazillion questions about newborn-related write-offs you can take before you file. We checked in with Lisa Greene-Lewis, TurboTax expert and CPA, to find out the top four things you need to know if you had a baby this year.
You Get a Deduction of $4,050 Per Child
It’s official: Your new baby qualifies as a dependent. In 2017, the IRS gives a deduction of $4,050 for each dependent claimed on your tax return. (And if your baby has siblings, they count, too.) Basically, these deductions reduce the portion of your income that is subject to federal tax. So, if you’re in the 15 percent tax bracket, this may save you $607.50 for 2017 and at 25 percent, $1,012.50 per dependent. (FYI, you also get a personal exemption of $4,050 for both you and your spouse on your tax return in 2017.)
…And You May Also Be Eligible for a Child Tax Credit
Yep, there’s an additional $1,000 credit you may be able to claim for children under 17. It’s even better than a tax deduction, because it reduces your taxes dollar for dollar. Qualification is based on factors like how much support you provide to your kids and where they reside. (FYI: for married couples with income over $110,000 or single parents who make more than $75,000, this credit phases out.)
You Can Write Off a Portion of Your Childcare
Great news: If you’re working (or actively seeking work) and you pay childcare for a dependent under 13 years old, you can claim the Child and Dependent Care Credit. This credit is a dollar-for-dollar reduction of your taxes, based on your childcare expenses. You can get up to 35 percent of $3,000 ($1,050) for one child or $6,000 ($2,100) for two or more children. (Nursery school, private kindergarten, after-school programs, summer day camps and day care are all qualifying expenses.)
…And the Cost of Any Onesies You Donate
News flash: Babies outgrow their clothes fast. Pass the ones in good condition on to a charity that accepts clothing donations and bump up the charitable deduction on your taxes. Total win-win.