Congratulations on Your New Baby/Deduction
Diapers, formula, clothes that will be worn once before they are already too small, strollers and bouncy chairs...babies are expensive! Luckily the government offers deductions to help cover the costs of your newborn. Allen and Associates, Inc. Tax & Bookkeeping in Smyrna, Tennessee explains the child deductions and tax breaks available to you.
This first deduction is awesome. Whether you gave birth to your new bundle of joy on January 1st, 2014 or on the last day of the year, December 31st, 2014, you get to claim your baby for the entire year... to the tune of $3,950 as a matter of fact. Plus, if you have more than one child you can take that deduction times the amount of children you are claiming. Can I hear a, “Sweet!”?
But wait there’s more. (I sound like an infomercial, don’t I?) According to the tax experts at Allen & Associates, depending on your income (lower is better in this case), you could qualify for $1,000 per child in tax credit form. If your children are under the age of 17 this is great because unlike a deduction, a tax credit offsets your taxes dollar for dollar.
Are you a single mom (or dad) or have you been separated from your spouse for over six months? If so, you can claim head of household as your tax status. This affords you a much lower tax rate than claiming to be single.
Lower Tax Rate = Tax Savings :-)
Okay, next money saving idea...are you a working parent whose children are in daycare? That can be super expensive, even more so than having a baby in diapers at home. (Believe me, I know. I went back to work and it was almost a wash getting paid to work and paying for daycare.) That said, there is some good news. If your child is 13 or under (there is no age limit if your child is disabled), you may be able to claim up to 35% of the first $3,000 of daycare expenses (or $6,000 if you have two children under 13 years of age).
Also, it is not just daycare that counts towards writeoffs. Individual care (as long as the caregiver is over 19 years old...it can even be a relative), preschool, a private kindergarten, and even after school care at public schools like MAC or the YMCA all count. All you need to do is make sure to get the caregiver’s social security number for your tax return. But the tax professionals at Allen and Associates would like to remind you that if you are claiming daycare expenses and you are married, both you and your spouse must work in order to prove the need for daycare.
Keeping all this information in mind, Allen and Associates, Inc. Tax and Bookkeeping in Smyrna would like to help you get the deductions and tax credits you are eligible for. Please visit their website at www.aasmyrna.com to set up an appointment today and let them help you get all the money back you are entitled to. Now stop reading this and go change a diaper.