7 Baby Tax Deductions, Credits & Exemptions

Having a baby is not only a beautiful time but the beginning of a new set of tax breaks for you! Here are some ways having a baby can help cut down your tax bill. Please note, you should always check with your Accountant or tax professional before filing your taxes, as all rules vary depending on income, filing status and location.

7 Ways you may be Eligible to get Tax Credits for Kids

The first step in taking advantage of this benefit is you will have to make sure your baby has his/her own social security number. A good thing to know is you can request a social security card at the same time you apply for your baby’s birth certificate at the hospital. Here are some ways you can cut back your tax bill with your new dependent(s)…

Dependency Exemption which means that claiming your child will protect a portion ($4,050) of your taxable income from taxes and could save you upwards of $1,000 depending on your tax bracket.
Child Tax credit of $1,000 no matter when your child was born in 2017. This credit will reduce your tax bill dollar for dollar. Note: This credit is subject to change depending on your income level.
Update your W-4 at work to cut back your tax withholding from your paycheck and increase your take home amount.
Earned income tax credit is a beneficial credit for families with low or moderate incomes. The goal of this credit is to offset social security taxes. May be worth speaking to your accountant about potential eligibility.
Child care credit is applicable to you if you pay for childcare in order to work. The credit can be anywhere between $600-$1,050 for one child (under age of 13) or between $1,200-$2100 if you have two or more under 13 years old in childcare.
Child care reimbursement account which is usually offered thru your job is another way to save some tax dollars. However you can not double dip this credit with the child care credit. This works thru a flex pay account where you can put up to $5,000 a year of your salary pre-tax to spend on your child care bills.
Adoption credit is a tax credit you can receive to offset the cost of adopting a child. The 2017 credit can be worth as much as $13,570.