Common Tax Errors New Parents Need to Avoid
This article highlights common tax mistakes new parents often make and provides essential tips to avoid these pitfalls. It covers topics like obtaining a child's SSN, claiming child-related tax credits, adjusting withholding, and understanding adoption and childcare credits. Proper awareness and timely action can help new parents maximize their tax benefits, save money, and ensure compliance with IRS regulations. Stay informed with updated tax tips and make the most of available government incentives for your growing family.
Common Tax Errors New Parents Need to Avoid
New parents can benefit from various government rebates, which can significantly ease the financial strain of raising a child. Many are unaware of how to claim these tax benefits correctly. This article highlights common tax mistakes made by new parents and offers tips to prevent them, ensuring you maximize your savings and benefits.
- Not Obtaining a Social Security Number (SSN) for the Child: Getting an SSN for your child is crucial, as it enables you to access various tax benefits. Hospitals usually assist with the paperwork, but parents must use the SSN when filing taxes.
Related Resources : Top 10 Tax-Friendly States in the US
- Neglecting to Modify Tax Withholdings: New parents often forget to update their employer's tax withholding forms. They should request a new W-4 form, indicating the addition of a child, to ensure proper withholding and maximize eligible rebates and credits.
- Overlooking Adoption Tax Credits: If you adopted a child, you might be eligible for a federal adoption credit of up to $13,400. This credit can be spread over five years and applies to children under 18, helping offset adoption costs.
- Missing Childcare Tax Credit: Parents paying for childcare services may qualify for a Childcare Credit, which can save thousands. Expenses up to $3,000 for one child and $6,000 for multiple children can be claimed.
Stay informed about the latest in Tax News. Follow us on Facebook and Twitter for more investment tips.
