November 18, 2014

The 5 Best Tax Breaks Uncle Sam Offers Moms and Dads

Parents are one of the best-treated groups when it comes to credits, deductions and other ways to reduce your tax bill. Here are five key tax breaks.

1. The Credit You Get Just for Being a Parent

The Child Tax Credit gives you as much as $1,000 per child to offset your tax liability, reducing what you owe dollar for dollar. To qualify for the credit, the child has to be a U.S. citizen age 16 or younger; a dependent on your tax return; and related to you by blood, marriage or adoption. You also have to provide more than half of the child's financial support, and the child has to live with you more than half the year. Finally, those whose adjusted gross income is above certain thresholds -- $75,000 for single filers and $110,000 for joint filers -- will see their credit phased out by $50 for every $1,000 in additional income above the threshold. The best part about the credit is that under certain circumstances, any unused portion of the credit can be refundable, allowing you to get a refund check even if you zero out your overall tax liability.

2. Get Help to Pay for an Adoption

If you're adopting a child, you know how costly the process can be. But the Internal Revenue Service has a substantial Adoption Credit you can take against your taxes to help you handle those costs.  


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