Are you a parent or going to become one soon? Learn how you can take care of your little ones and save money with our kids and taxes guide.
Kids and Taxes: Six Financial Steps to Take
As parents, it’s important to make sure you have your finances squared away. The problem is we usually don’t have much time to devote it.
Good news – here are a few things you can do quickly and easily:
- Amend your health insurance: The first two years includes many doctor visits. Make sure you fill out the paperwork to get your child added to your health insurance plan. It also means making sure you get the paperwork done for your baby to get a Social Security number.
- Look at signing up or adjusting your Flexible Spending Account: You may be able to lower your taxable income and take care of your new medical expenses by using a Flexible Spending Account through your job. Check with Human Resources to sign up for one if you haven’t already.
- Take advantage of tax credits, exemptions and deductions: There are several tax benefits that you can use when filing your return. You can deduct $4,050 as an exemption if you had a child last year. Don’t forget to look into child tax credit, child care credit, and saving for college.
- Adjust withholding at work: Check with Human Resources and see how you can properly adjust your withholdings for your paychecks this year.
- Prepare a baby fund: As much as you can research and estimate what having a baby costs, you won’t know how much exactly until they arrive. When you find out you’re having a baby, or when the two of you decide to start trying, go ahead and start saving in baby fund. You don’t have to keep it separate from your family savings – you can just build up your financial cushion.
- Ask for gift cards in your registry: Babies are little bundles of joy and they each have their own personalities. Don’t just assume that because most babies love their swing or their exosaucer, that yours will. Check the option to add gift cards with your registry so you can get baby gear that you need as it comes up.
If you want to find out more details, please feel free to check out some of my contributing posts over at TurboTax.
I love sharing tips on how families can save on their taxes.
We’ve been using TurboTax for years and love how easy it is to get our taxes done. You can check them out and see which edition of TurboTax is right for you.
Finances, Taxes, and New Parents
I’d like to get your thoughts on it. How many of you are parents? What financial changes did you make for your little one?
For those more experienced parents, what adjustments have you made over the years?
Does having more than one child significantly change things (financially) or they a smaller adjustment?
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