Tax Tips For Parents

Originally posted on the Tree.com Money and Finance Channel

We’re all busy during tax season, but when you’re a parent, you’ve got other things to worry about. Mainly your kids, AND your taxes.

Let’s take a look at some important things parents need to consider during tax season.

First, you need to make sure you’re not falling prey to some of the most common mistakes parents make in relation to taxes. There are tax mistakes everyone makes. Many forget to sign their returns, or forget to get their spouse to sign. Many filers forget to attach W-2 forms, or all of their W-2s. Many filers use insufficient postage, write their addresses sloppily on the envelope, or even mail their return late. Try to avoid these pitfalls by double checking everything,  using computer aides to help with tax prep, or even working with an experienced tax professional.

Don’t forget to make sure your dependents have social security numbers, even those newborns. It’s best to take care of this right away, so it’s a done deal come tax time. Be sure and check not only your dependent’s social security numbers on your forms, double check your own and your spouse’s as well.

Remember all year round to keep accurate records of childcare costs. If you’re a working parent and your children are under 13, there’s a good chance you’ll qualify for the child and dependent tax credit. To file for the tax credit, you’ll need your childcare provider’s tax ID or social security number.

Always remember to claim head of household status if you can. This is something that many single parents forget to claim, if they are eligible. Claiming head of household status allows you to claim dependents on your return.  Single parents are eligible for head of household status if they paid more than half of the cost of maintaining the household throughout the year, and lived with the dependents or children for more than half of that year.

Don’t forget to file for the child tax credit. It applies to children under 17 living with the parent claiming the credit for more than half of the year. This up to $1,000 credit phases out for higher earners, but many tax paying parents are eligible.

Make sure those teenagers with part-time jobs file their taxes. You could miss out on a valuable return, and you or your teenager could get some money back. To do that, they’ll need to file a return, just like their parents have to.

Try to take advantage of  tax advantage savings plans. College savings accounts offer some tax advantages you should be aware of. After tax money can grow tax-free as long as it is used to pay tuition fees. Many states allow deductions for contributions to college savings plans. You can also claim interest on your taxes if the college student is still a dependent. Also, don’t forget to take advantage of flexible spending, and 401K type accounts through your employer.

Keep these simple tips in mind for tax season. Consider taking advantage of the wide array of computerized tools available to help you with your taxes. You can even do simple returns using smart phones now! It’s also always a good idea to consider consulting a professional tax preparer during tax season.