March 29, 2023
As new parents, you have a lot to juggle, from diaper changes to midnight feedings. And while taxes might be the last thing on your mind, it's essential to understand your tax obligations now that you have a dependent. Understanding the tax benefits available to you as a parent and how to claim them is critical.
But don’t just take our word for it. We spoke with Clare Herceg, the Founder of Let’s Get Set, on the importance of not only understanding our tax obligations, but also why and how we should be maxing out our returns.
“Filing taxes as a new parent is exciting because you are newly eligible for tax credits (aka money back) for the first time, which means you may go from owing taxes to getting thousands back. Double check that you are receiving the Child Tax Credit, the Earned Income Tax Credit, and the Child and Dependent Care Credit on your federal taxes as those are the big ones! Some states have their own state versions of these credits too, which can mean even more money for you.”
Who is considered a dependent?
The Internal Revenue Service (IRS) considers a dependent to be a qualifying child or relative.
A qualifying child is a child who is:
A qualifying relative is a person who is:
If your child meets the above mentioned criteria, you can claim them as a dependent on your tax return.
What tax benefits are available to parents with dependents?
Parents with dependents are eligible for various tax benefits. Some of these include:
How to claim dependents on your tax return?
To claim your dependents on your tax return, you must provide their Social Security numbers. You will also need to file either Form 1040 or Form 1040-SR. If you use tax software, it will guide you through the process of claiming dependents.
Being a new parent is a fulfilling experience, but it can also be overwhelming, especially regarding taxes. Understanding the tax benefits available to parents with dependents and how to claim them can save you a lot of money. If you have any questions, don't hesitate to consult a tax professional or use IRS resources to ensure you are getting all the credits and deductions you are eligible for.
As mentioned earlier, parenting is time-consuming and unpredictable. Filing an extension for your taxes can be a good idea if you need more time to prepare or file your return.
Source: IRS, Filing Requirements, Status, Dependents
Why file an extension?
Filing an extension for your taxes gives you more time to prepare and file your tax return. The deadline to file taxes is typically April 15th of each year. However, if you need more time, you can request an extension, giving you an additional six months to file your return. Your tax return will be due on October 15th instead of April 15th.
How to file an extension for taxes with dependents?
Filing an extension for your taxes can give you more time to prepare and file your return. As a parent with dependents, it's important to ensure that you provide accurate information about your dependents on your extension request. Remember, an extension only gives you more time to file your return, not more time to pay your taxes. If you have any questions or need assistance, don't hesitate to consult a tax professional.
May 31, 2023