Being a parent is a stressful job, and when the tax season rolls around the stress level can go through the roof. It’s important to not panic. Know that being a parent is a wonderful thing, and the internal revenue service believes in that as well. It’s easy for you to get the tax breaks that you need if you take heed of this advice.
Taxes are easy to file, but you have options as to how you go about filing them. If this is your first child, then you should know that you are graduating from a 1040EZ form to a 1040 or 1040A form. This doesn’t mean much more work, and shouldn’t be a problem for you to handle on your own. However, if you are truly interested in getting a professional, they can handle these things for you.
Since you are smart enough to proceed by yourself, note that there are two things you can do as a parent, regardless of the amount of children you have: you can get a tax exemption and a tax credit. They are different in what they do for you. The child exemption is worth $3000 to you, the taxpayer. It reduces the amount government can say you can be taxed on. It’s like hiding that money from the government, only it’s legal. This can lower you into a different tax bracket and give you savings.
The child tax credit is much different in that, while it doesn’t reduce your taxable income, it’s money off the top of your tax bill. Since the bill is worth $1,000 per qualifying child, if you owed $1,000 before applying the credit, then you would owe $0 after the credit. It’s the easiest credit in the world to apply and it covers any child you have who you claim as a dependent and that is under the age of 17. The government does look out for the parents.