If you recently had or adopted your first child, filing your taxes probably is not a top priority. But even if you're sleep-deprived and haven't left your home in months, you still have to find the time to prepare a return.
With a new child, your taxes will get more complicated. But the flip side is you may qualify for a slew of new tax credits and deductions.
Here's what new parents need to know in the 2024 tax season:
The first order of business is to make sure your child has a Social Security number, said John Karls, a tax partner at Armanino, a national tax advisory firm. "You can't claim your child as a dependent on your tax return if they don't have a Social Security number."
If you don't already have one for your child, you should apply now. But it could take a while for the Social Security Administration to verify your child's birth certificate and identity, so Karls recommends filing for a six-month tax extension while you wait.
When can you file taxes this year?Here's when the 2024 tax season opens.
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If you're a single parent, for tax purposes you're considered the head of the household. That means you'll be able to claim a $20,800 standard deduction, versus a $13,850 standard deduction for single filers without dependents.
There are also separate, more favorable tax brackets for heads of households.
Importantly, the IRS won't automatically recognize that you're a single parent and thereby qualify for head-of-household status. You'll have to manually check a box yourself, or inform your tax preparer.
If you're married and cover more than half of your child's expenses, you would also be considered a head of household, but only if you file separately from your spouse.
Generally, people think having a child will automatically lower their tax bill or trigger a larger refund. But in many cases, it depends on your income. Lower-income taxpayers are generally eligible for more generous tax credits and deductions after having or adopting a child, said Jim Daniels, a CPA and managing director at UHY Advisors, a tax and consulting services firm.
If you adopted a child in 2023, you may be able to qualify for a credit of up to $15,950 in adoption-related expenses you incurred per child. This could include adoption-related attorney fees, adoption fees, traveling expenses and more.
To claim the full credit, your modified adjusted gross income, which is generally close to your adjusted gross income, must be below $239,230. After that, the credit phases out and is not available for people who have a modified gross adjusted income of $279,230.
The credit is not refundable, meaning if you don't owe any taxes, you won't be able to claim the credit. However, you can carry it forward to reduce your tax liability in the future.
If you became a parent in 2023, you could qualify for the Child Tax Credit if you have an adjusted gross income of less than $200,000 or less than $400,000 if you're filing a joint return with a spouse.
If you are employed and pay for childcare services, you may qualify for the Child and Dependent Care Tax Credit. To qualify, you must have earned income in 2023 and have work-related care expenses, among other rules. You can seek the credit for up to $3,000 of expenses for one child, $6,000 for two or more children. The actual credit is a percentage of those expenses. See IRS Publication 503 for the formulas.
Having a child could make you eligible for the Earned Income Tax Credit. If you have one child and your adjusted gross income was $46,560 (filing alone) or $53,120 (filing jointly with a spouse), you could claim up to $3,995 in a refundable tax credit.
Finally, if you haven't already, you should make sure to fill out a new W-4 form if you have an employer, to reflect that you now have a dependent. This will likely lower the refund you get next year, but it will increase the size of your paychecks going forward, Daniels said, because less money will be withheld.
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Daniel de Visé covers personal finance for USA TODAY.
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