Kids bring joy, chaos... and tax benefits. What to know as a new parent filing a return
Kids bring joy, chaos... and tax benefits. What to know as a new parent filing a return
Show Caption
Hide Caption
Taxes are different this year: what filers should know
President Donald Trump proposed several substantive and not-so-substantive changes to tax policy, but which have become real?
If you welcomed a new baby, adopted a child, or became a stepparent in 2024, your tax return should look different this year.
While you may be busy adjusting to life with your new family member, don't forget to file your tax return before the federal April 15 deadline. Experts advise taxpayers to file sooner rather than later to avoid mistakes. If new parents set aside time to research deductions and credits they may now qualify for, they can save hundreds if not thousands of dollars.
'One of the biggest life changes is new dependents,' said Mark Steber, senior vice president and chief tax officer at Jackson Hewitt. 'New parents in particular have a whole host of new considerations.'
Between diaper changes, meal prepping, and doctors' visits, you've got your hands full. Here are some things to avoid getting lost in the shuffle:
More: What is the average tax refund? Why yours might be lower or higher
Your dependent's proof of birth
Make sure to keep track of your new dependent's social security number, adoption tax identification number or individual tax identification number.
Confirming your child's birth is the only way the IRS can verify you are eligible to claim parental tax breaks.
Once you have it, make sure it is entered correctly on your tax forms. Mistyping social security numbers is one of the simplest, yet most significant mistakes people make on their returns, according to TurboTax CPA and tax expert Lisa Greene-Lewis.
Your filing status
There's a chance that a new dependent may bring a new tax filing status.
If you were previously married filing jointly and had a child join your family in 2024, it will likely remain the same, but you and your spouse might expect more credits and deductions to be available to you.
If you are legally single, experts advise you to change your filing status to head of household to maximize your benefits if you are eligible.
Everyone's circumstances are different. If you're unsure of the best filing status for you, the IRS has a five-minute online survey to help you decide.
Credits and deductions
Kids bring many things to parents' lives including love, chaos, and a whole new perspective, but tax experts agree they also bring something else important.
'Kids are worth valuable deductions,' Greene-Lewis said.
In addition to higher thresholds for the standard deduction and the Earned Income Tax Credit, here are some credits you shouldn't miss out on, according to the IRS:
The Child Tax Credit : Taxpayers can claim up to $2,000 for each qualifying dependent child when filing their return this year so long as they meet all eligibility factors and have an annual income under $200,000 or under $400,000 if filing a joint return.
: Taxpayers can claim up to $2,000 for each qualifying dependent child when filing their return this year so long as they meet all eligibility factors and have an annual income under $200,000 or under $400,000 if filing a joint return. Child and Dependent Care Credit : If taxpayers paid for childcare or daycare expenses, they may qualify for this credit and claim up to 35% of those expenses so long as they are eligible.
: If taxpayers paid for childcare or daycare expenses, they may qualify for this credit and claim up to 35% of those expenses so long as they are eligible. Adoption Tax Credit: Taxpayers may claim eligible adoption expenses for each eligible child if they went through the adoption process during 2024. It applies to international, domestic, private, and public foster care adoptions.
Adjustments to your withholding
After you file your return, make sure to fill out a new W-4 form with your employer reflecting that you now have a dependent. The change will likely lower your withholding and decrease your tax refund in 2026, but will increase the size of your paychecks going forward.
Reach Rachel Barber at rbarber@usatoday.com and follow her on X @rachelbarber_
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Washington Post
21 minutes ago
- Washington Post
Top US universities raced to become global campuses. Under Trump, it's becoming a liability
WASHINGTON — Three decades ago, foreign students at Harvard University accounted for just 11% of the total student body. Today, they account for 26%. Like other prestigious U.S. universities, Harvard for years has been cashing in on its global cache to recruit the world's best students. Now, the booming international enrollment has left colleges vulnerable to a new line of attack from President Donald Trump. The president has begun to use his control over the nation's borders as leverage in his fight to reshape American higher education. Trump's latest salvo against Harvard uses a broad federal law to bar foreign students from entering the country to attend the campus in Cambridge, Massachusetts. His order applies only to Harvard, but it poses a threat to other universities his administration has targeted as hotbeds of liberalism in need of reform. It's rattling campuses under federal scrutiny, including Columbia University , where foreign students make up 40% of the campus. As the Trump administration stepped up reviews of new student visas last week, a group of Columbia faculty and alumni raised concerns over Trump's gatekeeping powers. 'Columbia's exposure to this 'stroke of pen' risk is uniquely high,' the Stand Columbia Society wrote in a newsletter. People from other countries made up about 6% of all college students in the U.S. in 2023, but they accounted for 27% of the eight schools in the Ivy League, according to an Associated Press analysis of Education Department data. Columbia's 40% was the largest concentration, followed by Harvard and Cornell at about 25%. Brown University had the smallest share at 20%. Other highly selective private universities have seen similar trends, including at Northeastern University and New York University, which each saw foreign enrollment double between 2013 and 2023. Growth at public universities has been more muted. Even at the 50 most selective public schools, foreign students account for about 11% of the student body. America's universities have been widening their doors to foreign students for decades, but the numbers shot upward starting around 2008, as Chinese students came to U.S. universities in rising numbers. It was part of a 'gold rush' in higher education, said William Brustein, who orchestrated the international expansion of several universities. 'Whether you were private or you were public, you had to be out in front in terms of being able to claim you were the most global university,' said Brustein, who led efforts at Ohio State University and West Virginia University. The race was driven in part by economics, he said. Foreign students typically aren't eligible for financial aid, and at some schools they pay two or three times the tuition rate charged to U.S. students. Colleges also were eyeing global rankings that gave schools a boost if they recruited larger numbers of foreign students and scholars, he said. But the expansion wasn't equal across all types of colleges — public universities often face pressure from state lawmakers to limit foreign enrollment and keep more seats open for state residents. Private universities don't face that pressure, and many aggressively recruited foreign students as their numbers of U.S. students stayed flat. The college-going rate among American students has changed little for decades, and some have been turned off on college by the rising costs and student debt loads. Proponents of international exchange say foreign students pour billions of dollars into the U.S. economy, and many go on to support the nation's tech industry and other fields in need of skilled workers. Most international students study the STEM fields of science, technology, engineering and math. In the Ivy League, most international growth has been at the graduate level, while undergraduate numbers have seen more modest increases. Foreign graduate students make up more than half the students at Harvard's government and design schools, along with five of Columbia's schools. The Ivy League has been able to outpace other schools in large part because of its reputation, Brustein said. He recalls trips to China and India, where he spoke with families that could recite where each Ivy League school sat in world rankings. 'That was the golden calf for these families. They really thought, 'If we could just get into these schools, the rest of our lives would be on easy street,'' he said. Last week, Trump said he thought Harvard should cap its foreign students to about 15%. 'We have people who want to go to Harvard and other schools, they can't get in because we have foreign students there,' Trump said at a news conference. The university called Trump's latest action banning entry into the country to attend Harvard 'yet another illegal retaliatory step taken by the Administration in violation of Harvard's First Amendment rights.' In a lawsuit challenging the Trump administration's previous attempt to block international students at Harvard, the university said its foreign student population was the result of 'a painstaking, decades-long project' to attract the most qualified international students. Losing access to student visas would immediately harm the school's mission and reputation, it said. 'In our interconnected global economy,' the school said, 'a university that cannot welcome students from all corners of the world is at a competitive disadvantage.' ___ The Associated Press' education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at
New York Times
22 minutes ago
- New York Times
Live Updates: Trump-Musk Alliance Dissolves as They Hurl Personal Attacks
Pinned President Trump and Elon Musk's alliance dissolved into open acrimony on Thursday, as the two men hurled personal attacks at each other after the billionaire had unleashed broadsides against the president's signature domestic policy bill. While meeting with Friedrich Merz, Germany's new chancellor, in the Oval Office, Mr. Trump broke days of uncharacteristic silence and unloaded on Mr. Musk, who until last week was a top presidential adviser. 'I'm very disappointed in Elon,' Mr. Trump said. 'I've helped Elon a lot.' As the president criticized Mr. Musk, the billionaire responded in real time on X, the social media platform he owns. 'Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate,' Mr. Musk wrote. 'Such ingratitude,' he added, taking credit for Mr. Trump's election in a way that he never has before. Mr. Musk had been careful in recent days to train his ire on Republicans in Congress, not Mr. Trump himself. But he discarded that caution on Thursday, ridiculing the president in a pattern familiar to the many previous Trump advisers who have fallen by the wayside. What started as simply a fight over the domestic policy bill sharply escalated in just a few hours. Within minutes of one another, Mr. Trump was making fun of Mr. Musk's unwillingness to wear makeup to cover a recent black eye, and Mr. Musk was raising questions about Mr. Trump's competency as president. The public break comes after a remarkable partnership between the two men. Mr. Musk deployed hundreds of millions of dollars to support Mr. Trump's 2024 presidential campaign. After Mr. Trump won, he gave Mr. Musk free rein to slash the federal work force. And just last week, Mr. Trump gave Mr. Musk a personal send-off in the Oval Office. The president praised Mr. Musk as 'one of the greatest business leaders and innovators the world has ever produced' and gave him a golden key emblazoned with the White House insignia. Mr. Musk promised to remain a 'friend and adviser to the president.' But now Mr. Musk, who has left his temporary role, has turned into the most prominent critic of a top presidential priority. Mr. Musk has lashed out against the far-reaching policy bill in numerous posts on X. He has called it a 'disgusting abomination,' argued that the bill would undo all the work he did to cut government spending and hinted that he would target Republican members of Congress who backed the legislation in next year's midterm elections. Mr. Trump on Thursday said Mr. Musk's criticism of the bill was entirely self-interested, saying he only opposed the legislation after Republicans took out the electric vehicle mandate, which would benefit Tesla, Mr. Musk's electric vehicle company. (Mr. Musk has previously called for an end to those subsidies.) The president also downplayed Mr. Musk's financial support for him during the campaign, arguing he would have won Pennsylvania without Mr. Musk, who poured much of his money and time into the critical battleground state. Mr. Musk also on Thursday rebutted Mr. Trump's statement that Mr. Musk 'knew the inner workings of the bill better than anybody sitting here.' 'False, this bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!' Mr. Musk wrote, sharing a video of Mr. Trump saying he was disappointed in Mr. Musk.
Bloomberg
23 minutes ago
- Bloomberg
US Steel Deal Seen Closing by Merger Deadline After Trump Pivot
Nippon Steel Corp. and United States Steel Corp. are on pace to finalize their $14.1 billion combination with US President Donald Trump's administration ahead of a deal deadline later this month, capping an 18-month saga to combine the steelmakers into the world's second-largest producer. Talks on the deal between the companies and the US government are ongoing and expected to reach a conclusion before a June 18 merger agreement deadline, according to people familiar with the matter, speaking on condition of anonymity given that talks are confidential. US Steel and Nippon Steel declined to comment. A Treasury Department spokesperson declined to comment.
