While your kids may give you gray hair, raise your blood pressure and often cost a fortune, take a deep breath.
Because they actually can save you money at tax time.
Thankfully Uncle Sam gets that raising kids is hard. So he offers a bunch of deductions and credits.
And single parents -- if the kids live with you and you pay the majority of your household's costs, don't forget to file as Head of Household.
Now on to your deductions and credits
-For this year, you still can claim a $4,050 exemption for each qualifying child -- that's basically any kid that lived with you more than half of the year, was under 19 at the end of 2017 (or under 24 and a full-time student for the year) and you provided more than half of that kid's support.
Sadly, like all deductions, there is an income phase-out, so when your adjusted gross income hits a certain level, you won't get the deduction anymore. (Check out IRS Publication 501, Exemptions, Standard Deduction and Filing Information for more info.)
-Same goes for the Child Tax Credit. You can get as much as $1,000 for each of your kids that were under age 17 at the end of 2017. But again, you have to meet a bunch of qualifying tests and show that you supply more than 50% of support to that kid.
But it also is phased out when your income gets too high.
-If you have to pay someone to care for your kids under age 13, so that you could work or look for work, you may qualify for Child and Dependent Care Credit. It maxes out at $600 for a single kid.
But it includes daycare, day camp or any activity that they are in so you can work.
-If you adopted in 2017- Congratulations!!!! Even better, you may be able to take a tax credit of up to $13 500 for some of the expenses you incurred to adopt your little bundle of joy.
-If you kindly took in exchange students, you may be able to deduct $50 a month as a charitable contribution so talk to your preparer We get it's not much, but take it anyway.
-And don't forget about the Higher Education Credits for college, like the American Opportunity Credit, which maxes at $2,500 and the Lifetime Learning Credit, which peaks at $2,000. You can only choose one, so check out the IRS site to figure out which one is best for you.
And of course theres the Student Loan Interest Deduction, which could be as much as $2,500. (Read IRS Publication 970 - Tax Benefits for Education for more details.)
And finally, don't forget, that if your kid had a summer job - and got a W-4 - that income may have to be reported somewhere. Read this column for everything you need to know!
Now watch the clip above to learn more!
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