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Tax tips for busy parents

Posted on August 8, 2023

Whether you just brought home your first baby or your third, adopted a teen from foster care, or are raising a grandchild, the CPAs at Teipen CPA Group recommend seeing if you qualify for certain tax breaks to help defray some related expenses:

  • First order of business is to apply for your child’s Social Security or Individual Tax Identification number

To claim parental tax breaks, you must have your child or dependent’s Social Security numberAdoption Tax Identification Number, or Individual Tax Identification number. Confirming a child’s birth is the only way the IRS can verify that a parent is eligible for the credits and deductions they claim on their tax return.

  • Check withholding

Adding a new family member might make you eligible for new tax credits and deductions. Go to IRS.gov to visit IRS Withholding Estimator to find out. You should also provide your employer with an updated Form W-4, Employee’s Withholding Certificate, if you want to change how much tax is withheld from your paycheck.

Check eligibility for these tax credits and deductions

  • Child Tax Credit

If you claim at least one child on your tax return, you may be eligible for the Child Tax Credit. For help figuring out if a child qualifies for this credit, go to Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?

  • Child and Dependent Care Credit

If you pay someone to take care of your children (or another member of your household) while you work, you may qualify for the Child and Dependent Care Credit regardless of your income. Taxpayers who pay for daycare expenses may be eligible to claim up to 35% of their daycare expenses with certain limits.

  • Adoption Tax Credit

This credit lets families who are in the adoption process during the tax-year claim eligible adoption expenses for each eligible child. Taxpayers can apply the credit to international, domestic, private, and public foster care adoptions.

  • Earned Income Tax Credit

The Earned Income Tax Credit helps low- to moderate-income families get a tax break. If you qualify, you can use the credit to reduce the taxes you owe – and maybe increase any potential tax refund.

  • Credit for Other Dependents

If you have dependents who don’t qualify for the Child Tax Credit, you  may be still able to claim the Credit for Other Dependents. Review Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents tool on IRS.gov to help determine if you are eligible.

The CPAs at Teipen CPA Group also want you to know that you can also claim this credit in addition to the Child and Dependent Care Credit and the Earned Income Credit.

All these possibilities are certainly worth taking a look at. Please don’t hesitate to ask us for clarification on these and any other questions you may have about your present family tax situation.