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Kids and Taxes: 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 – there are a few key things you can do to set up your finances that won’t take a ton of time. A
Make Sure Your Kid Has Health Insurance
The first two years include many doctor visits even if your kid is healthy. 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.
Double Check To Make Sure You’re Maximizing Your Tax Savings
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.
Adjust Your Paycheck Withholding
Check with Human Resources and see how you can properly adjust your withholdings for your paychecks this year.
This can be a huge help as you can have more money in each paycheck instead of waiting until next tax season to see your money.
Kids and Taxes:
what You Need to Know
Tax time is here and I know for many parents, they’re wondering how the tax reform bill affects them. Here are a few things to keep in mind.
- Standard Deduction: A big change for couples and parents is the standard deduction. For 2018, a married couple filing jointly will see their deduction pretty much double from $13,000 to $24,000.
- Child Tax Credit: For 2018, the amount of the Child Tax Credit per qualifying child doubles from $1,000 to $2,000. The child tax credit is also extended to more families. (For married couples filing jointly, the Maximum AGI to get the full credit is $400,000) Another bonus – $1,200 of the $2,000 tax credit is refundable.
These all sound like wonderful changes, but I want to also point out that parents will lose the personal exemption that had been available in previous years.
Looking at the numbers, though, the new changes should more than offset that.
Maximizing Your Tax Refund
Those are the essentials you need to know when it comes to kids and taxes. 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 and finances through out the year. TurboTax also has a team of experts that can help you with your particular situation.
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.
Your Take on Taxes as a Parent
I’d love to get your thoughts on some ways parenthood can help with your finances. What financial changes did you make for your little one?
For those more experienced parents, what adjustments have you made over the years?
This article was originally published in March 2018. It’s been updated January 2019.
This post may contain affiliate links. Please read my full disclosure for more info.
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