It’s tax time again. Somehow filing your income tax return sneaks up on you, but now is the time to start gathering receipts and figuring out how to maximize deductions. To help you, here are a few tax tips every mama should know.
1. The Dependent Exemption – In addition to claiming your children as dependents, you can also claim children under age 24 that are full-time students. In the case of unmarried parents, usually the custodial parent claims the child.
2. The Child Tax Credit – Taxpayers with qualifying children under age 17 can get a tax credit of up to $1,000 per child. This credit is subject to income limitations. Remember, once your child turns 17 you can no longer get this credit.
3. Child and Dependent Care Credit – Taxpayers can claim a credit for a percentage of dependent care expenses, such as daycare, preschool, after-care, and camps. The maximum qualifying expenses are $3,000 for one dependent and $6,000 for two or more dependents. You must have earned income to qualify for this credit and if married, both spouses must work. Qualifying children must be under the age of 13.
4. Education Credits – If you or your child is enrolled in college or pursuing higher education you may qualify for the American Opportunity Credit or the Lifetime Learning Credit. The maximum credits are $2,500 and $2,000 respectively. These credits are subject to income limitations, and beginning in 2016 must have a 1098-T to claim the credit.
5. Lactation Expenses as Medical Expenses – Breast pumps and other lactation supplies are now tax deductible medical expenses. Medical expenses are subject to income limitations, so many will not qualify to deduct these on their tax return. However, if you have a medical flexible spending account through your employer, you can use these expenses against your plan.
6. Hawaii State income tax car seat credit $25 – There is a “Child Passenger Restraint System” tax credit in Hawaii of $25. To claim this credit, you must attach your receipt showing the car seat purchase to your tax return.
Most people have a tax preparer or use some kind of tax software. Often, deductions and credits can get lost in the mix of communicating information or trying to figure out how to input things in the “do-it-yourself” tax programs. It is important to review the entire tax return before it is filed to look for errors or missing information.
If you are uncertain about your tax return and what you can claim or deduct, I encourage you to seek advice from a tax professional. The benefits of professional advice and planning can be well worth the cost.
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