baby registry

need to buy a gift?

Find baby registries (at top retailers!) and websites with one easy search.

what's hot around the web

you asked...

Q&A: Tax breaks with baby?

Tax season is approaching and I’m wondering if I’m eligible for any breaks if I have children?

Re: Tax season is approaching and I’m wondering if I’m eligible for any breaks if I have children?

The Bump Expert

Yep, kids = deductions, credits, and exemptions. Here are some guidelines my own tax pro gave me:

Everyday costs: The IRS gives you a $3,500 exemption for each child, which means you can lower your income by that amount for tax calculation purposes. For example, if you and your husband earn $100,000, you could calculate your taxes based on an income of $96,500.

After that, you may be eligible for an extra $1,000 tax credit for children under 17. Tax credits work like gift cards from the IRS. After calculating how much you owe, treat the credit like cash and wipe its amount directly off your tax total. The remaining balance is what you'll pay the government.

This tax credit isn’t for everyone. Married people with an income of $110,000 and below and single parents with an income of $75,000 and under can claim the full $1,000 amount. If you make more, the dollar amount of the credit drops by $50 for every additional $1,000 you earn.

Childcare expenses: Have a nanny or use a daycare? You can set aside $3,000 of your childcare costs ($6,000 if you have two or more kids). Then, you can multiply that amount by 20 to 35 percent, depending on your income. (For the full 35 percent you need to earn under $15,000. After that as your income rises the percent you can take goes down.)  The answer is the amount of money you can slice from your tax total. The best part: This credit is for everyone. There’s no income ceiling.

Medical expenses: Medical expenses are only deductable if they add up to more than 7.5 percent of your income. Benefits, however, are the perks of having a job, and some companies offer Flexible Spending Accounts. That means your employer can put up to $5,000 of your salary into an account for you to use for medical expenses. (Think doctor copays, eye exams, and over-the-counter drugs.) The catch: This may interfere with your ability to take the childcare credit, so look at your financial situation from both angles -- getting some professional tax help probably wouldn’t hurt. Also, these accounts are usually use-or-lose, which means if there’s money left in there when the year ends, it’ll evaporate unspent.

Brett Graff

re: Q: Tax breaks with baby?

With medical expenses, don't forget about all those hospital bills if your child was born in 2008. Even medical mileage can possibly be considered when looking for deductions (my doctor & hospital are 30 miles from home, so that added up!).

Princess_Ariel |

re: Q: Tax breaks with baby?

If my baby will born in October 2009, do I claim them on my 2009 tax return?

mcmaestas |

re: Q: Tax breaks with baby?

Yes. Unless the baby is born after 12pm on 12/31/2009, they will go on 2009's taxes.

|

Q&A: Tax breaks with baby?

If my baby is born in february 2012, do I claim the baby on my 2011 or 2012?

7wekenzwanger |

Q&A: Tax breaks with baby?

You will claim the baby on your 2012 taxes.

MattsLeftyBride09 |

Q&A: Tax breaks with baby?

whats the min u can make a year and still receive child tax credit?????

mamabracy |

Q&A: Tax breaks with baby?

Taxes are so complicated. I suggest that you hire a professional to help you with that. Having a sales tax audit is something quite common nowadays. Good luck and God bless you!!

jacklondon |

Q&A: Tax breaks with baby?

financial tax planning - uk tax planning, uk tax services, accountants Cumbria, J F Hornby.
consumer research - consumer research specialist that focuses on understanding consumer behaviour and customer experience.
billboard advertising - bus advertising, Put your promotional poster where your best prospects can't miss it.
investment management - portfolio management company with an established reputation for professionalism and personal service.
pop up stands - Reflex Exhibitions UK for fast design and delivery of unrivalled value Portable Banner Stands.
bioanalysis jobs - Chemistry Jobs which include Analytical Chemistry, predominantly Mass Spectrometry and Chromatography.
foreign exchange for business - VFX support you with the best technology, competitive exchange rates and peace of mind that your money is safe.
money rates - currency exchange service, currency transfers,money transfers,international money transfers.
foreign exchange - Here at Best Exchange Rates UK, we carry out all our transfers online so they are straight forward

Doremon |

Q&A: Tax breaks with baby?

Thanks for this great article, I am also thinking to ask for a tax break this year so this article came in the perfect moment. I even thought about contacting Florida Federal Credit Union for a credit.

deanjohnson |

Q&A: Tax breaks with baby?

I would love to see how a family from the middle class is dealing with those taxes. I recently had a discussion with my friend, Perry Belcher. I believe that the taxes are still too high and maybe the young families should have more privileges.

LenBrannon |