07.09.2014

Having a baby tax write off

You cannot take a write-off for nonprescription drugs of any sort: If it's an over-the-counter medicine, it's not deductible.
You can only write off pregnancy-related and other medical expenses if you itemize deductions on Schedule A. That said, one of the nice things about the tax code, and there aren’t too many nice things, is that there are a litany of tax benefits available only to families (or at least family units with dependents, such as children).
Kids can be overwhelming when they are cooped up in the house in the wintertime, but they are also blessed tax-savers when you file your tax return this time of year. This credit is a dollar for dollar reduction of your taxes, based on your child care expenses up to 35% of $3,000 for one child or $6,000 for two or more children. So next time the kids are driving you crazy, remember the tax savings and give them a big hug instead. The birth of a child is a life-changing event that can affect many aspects of your finances, including your income tax returns. Dependent ExemptionYou can take a dependent exemption of $3,800 for each dependent you can claim on your tax return. Child Tax CreditThe Child Tax Credit is a tax break that reduces tax liability by up to $1,000 for middle- and low-income parents. The medical bills that come with pregnancy and childbirth are a legitimate tax deduction, just like your other medical expenses.
There's also no deduction for all the little extras that make motherhood easier: Maternity clothes, diaper services, babysitting, nanny care or hiring household help when you're too busy with baby to clean.


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I hadn’t spent much time thinking about it until just recently but I collected a bunch of tax tips I hope to use after our kid comes screaming out of the womb. The Earned Income Tax Credit is a credit given to low income individual and families, but the limit is quite low for those without children.
You may also be eligible for a tax credit, which is even better than a deduction, since it reduces your taxes dollar for dollar.
The government offers tax exemptions and credits to the parents of dependent children, so having a baby can reduce your income tax liability. The Internal Revenue Service offers a child and dependent care credit to parents that pay for childcare expenses to work or look for work. If you only suspect you're pregnant and you buy a test kit to confirm it, that's a valid write-off too. Nutritional supplements are generally on the Internal Revenue Service's No list, but you can write them off if your doctor explicitly recommends you take them during pregnancy.
There are income limitations (the phase out starts at $110,000 and ends at $130,000) but it’s a direct tax credit of up to $1000, not a tax deduction, so it can have a big impact on your tax bill. As a result, to avoid a larger than necessary tax rebate, you should adjust your withholding with your employer.
The Child Tax Credit is an additional $1,000 credit you may be able to claim for children under 17.


The IRS offers a tax credit of $12,650 for costs directly related to adoption, such as necessary adoption fees, legal fees and travel expenses.
The rules for claiming the deduction also limit how much, if any, pregnancy-related costs you can write off.
The refundable tax credit you can receive ranges from a maximum of $5,891 if you have three children, to $475 if you have no children. A baby born during the year is considered to have lived with you for the entire year if he lives with you the whole time is alive during the year. Adopted children are treated the same as your biological children for the purposes of other tax breaks, like the dependent exemption and Child Tax Credit.
Unlike other tax credits, the earned income credit is refundable, so if the credit is greater than the tax you owe, the IRS will send you the difference. In other words, if your baby is born a few days before the end of the tax year, you can still claim a dependent exemption on the child for that year.



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