How Does Your Tax Life Change After Parenthood in Columbia MD

How Does Your Tax Life Change After Parenthood in Columbia, MD?

We have to make decisions every day in our life. Some decisions are simple, like whether or not we go to work on any particular day and do not hugely affect our lives. But some decisions change the way we live. One such decision is having a child. Parenthood is a major life-changing decision, and it impacts almost every aspect of our lives. However, we will explore the changes related to your tax life in this article. 

Generally, having a child means that your expenses will increase, and you have to adjust or enhance your finances accordingly, but that is not true in the case of taxes. Taxpayers are entitled to refunds and tax credits for each qualifying child. The government aims to empower the parents and caregivers so that they can take better care of your child. 

As a parent or caregiver to a legally adopted child, you are entitled to the following credits in Columbia, MD

  • Child Tax Credit and Additional Child Tax Credit:

The IRS child tax credit allows you to enjoy a tax credit worth $2,000 for each qualifying child you have. In addition to providing refunds for children, tax reform also provides a $500 non-refundable credit for qualifying dependents. However, this additional credit for dependents is temporarily allowed and may discontinue in future. It is pertinent to mention that out of $2,000 credit for each child, only $1,400 is refundable.

  • Earned Income Tax Credit (EITC):

Depending on how many children you have, you are entitled to the earned income tax credit. The EITC is one of the most helpful among all the tax credits and refunds because it is a refundable tax credit. You can claim a refund against the EITC if you owe the IRS, amount less than the refund. 

  • Child and Dependent Care Credit: 

Having a child puts a considerable amount of financial pressure on the parents. Sometimes, both parents need to work in order to meet the expenses. To achieve that, the couple needs to hire a childcare service to take care of their children while they work. The cost of childcare can be offset with the help of Child and Dependent Care Credit

  • Adoption Credit: 

The adoption costs can be eliminated with the help of Adoption Credit. However, this credit is non-refundable. 

  • 529 Plan:

Education is an important part of parenting expenses. Parents need to plan for their children’s education from early years so that they don’t have to bear a huge burden at the college stage. Plan 529 is the most suitable instrument to achieve that. You can lower the state taxes by contributing to the 529 Plan. Additionally, there is no tax on withdrawal from this pan for educational purposes. 

The above-mentioned tax refunds and credits can be of huge help from the government to offset or reduce the parenting expenses. Make sure that you get a birth certificate for your newborn child and apply for a social security number right after the birth of every child. You just need to get your documentation in order and enjoy the tax benefits after having children. 

USA Tax Settlement strives to help taxpayers get out from under their IRS tax debt. Unlike other so called Best Tax Resolution Companies in Columbia, MD that charge outrageous fees and don’t deliver on their promises. USA Tax Settlement employs tax professionals, tax attorneys and IRS enrolled agents so we can provide IRS Tax Debt help in Columbia, MD. Stop stressing over your tax debt and let our IRS Tax experts in Columbia, MD settle your IRS tax debt for a fraction of a cost. USA Tax Settlement can help with various IRS Tax Relief Programs or Tax Debt Forgiveness Programs. If you need IRS Tax Relief Columbia, MD then call USA Tax Settlement today for a Free Consultation. Remember, having one of the Best Tax Relief companies in Columbia, MD on your side is your best first step.

Leave a Comment

Your email address will not be published.

Recent Blogs

Tax Audit in West Covina, CA – How Do You Prepare For It?

Tax Audit in West Covina, CA – How Do You Prepare For It?

Credit Score IRS Debt Tax Tax Debt Tax Professional Tax Relief Tax Resolution Company Tax Settlement
Have you received a tax audit notice in West Covina, CA? Here are all the things you need to do to prepare yourself for tax audit.
Read More
Tax Exemptions in Yorba Linda, CA – See If You Qualify

Tax Exemptions in Yorba Linda, CA – See If You Qualify

Credit Score IRS Debt Tax Tax Debt Tax Professional Tax Relief Tax Resolution Company Tax Settlement
Is your organization looking to gain tax exemptions in Yorba Linda, CA? Read this article to see if you qualify for IRS tax exemptions.
Read More
Self-Employment Tax in Anaheim, CA – Things to Know

Self-Employment Tax in Anaheim, CA – Things to Know

Credit Score IRS Debt Tax Tax Debt Tax Professional Tax Relief Tax Resolution Company Tax Settlement
Are you a self-employed individual? Read this article to know everything about self-employment tax in Anaheim, CA.
Read More
1 2 3 35