New parents are often unaware of the changes in their taxes that come along with having children. Vanessa Borges, a tax preparation supervisor for the Tax Defense Network (www.taxdefensenetwork.com), shares these tips to make this challenging issue a bit more manageable:
1. 1. What are some common errors new parents make when filing their taxes for the first time?
Many new parents don’t have the time or the energy to research the tax benefits available to them. First thing’s first: make sure you get a Social Security number for your new child. (You'll need one to claim your child as a dependent on your tax return and to receive all the tax benefits that are available to you!) If you didn’t receive one, you'll need to file a Form SS-5 with the Social Security Administration and provide proof of the child's age, identity and U.S. citizenship.
2. 2. What are the biggest changes that come with filing taxes with children vs. without?
There’s one benefit to having children, besides the joy they bring you: tax breaks. To claim those benefits, make sure you are informed and use a tax professional to prepare your taxes. If you plan to file them yourself, research thoroughly! Check the eligibility rules for each tax break listed to ensure that you meet the requirements.
3. 3. Are there any special deductions parents can take advantage of?
Yes, there are several! These include a dependency exemption, a $1,000 child tax credit, child credit, a save for college credit and many more. Talking to a tax professional is extremely beneficial.
4. 4. Does Obamacare affect the way new parents should be filing their taxes?
The majority of kids from low or middle-income families will continue to qualify for free or low-cost health care. These programs have been in effect for years and will continue to provide benefits. Also, through Obamacare, many privately run health insurance companies will offer similar benefits for parents and kids. You can find out if your family is eligible for a plan by visiting the virtual health insurance marketplace at HealthCare.gov.
The Tax Defense Network’s nationwide network of tax professionals provides financial advice on a variety of subjects including payroll taxes and tax debt resolution. The Tax Defense Network’s team of licensed tax professionals, enrolled agents, and CPAs has resolved more than $120 million in tax debt. The Tax Defense Network is A+ rated by the Better Business Bureau. Learn more about the Tax Defense Network on Twitter or Google+.