New Baby? Don't Forget To Include Them On Your Tax Return!

Congratulations! Having a new baby is an exciting occasion. We all know the preparations needed to bring the baby home…setting up a nursery, buying diapers and formula, adjusting to a new sleep cycle. But many people forget that there are tax implications. There are several deductions and credits that you may be eligible for. The first task is to make sure your child has applied for a Social Security Number (SSN). Many hospitals help you complete this paperwork, but if they don’t, you will need to apply on your own. You will need to visit your local Social Security Administration office, and will need a copy of the child’s birth certificate.

Once you have a SSN for your child, you will be able to claim them as a dependent on your tax return (assuming you meet all the other eligibility requirements). You may also qualify for additional credits:

• Child Tax Credit - This gives you a credit of up to $1,000 per child, depending on your Adjusted Gross Income (AGI).
• Child and Dependent Care - Again, depending on your AGI, you may be eligible to deduct child care expenses.
• Earned Income Credit - Having a child can qualify you for a larger credit. 
• Adoption Credit - If you adopted the child, you may be able to deduct certain expenses (such as legal fees and travel).
• Medical Expenses. If you had out-of pocket expenses related to the birth of the child, you may be able to use these to get a higher itemized deduction.

Visit your local PRO-TAX office to meet with a trained tax preparer. They can help you determine if you will be eligible for any of these credits, and can give you the guidelines on what paperwork needs to be filed.

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