From after-school swimming lessons to four years of college tuition, raising kids can really take a toll on your wallet. Luckily, having children can pay off when you're filing your tax returns in April. Here are eight tax benefits outlined by the IRS that parents should take advantage of this tax season.
To receive one tax exemption per child, you may claim your children as dependents if they meet all five qualifying tests: relationship, age, residency, support, and joint return. This applies to a child born anytime in 2013 as well.
2. Child Tax Credit
To receive a maximum of $1,000 per child, you may claim a Child Tax Credit for each qualifying child under the age of 17 at the end of 2013. If you receive less than the full amount of the credit, you may be eligible for the Additional Child Tax Credit.
3. Child and Dependent Care Credit
To receive the Child and Dependent Care Credit, you must have paid for someone to care for your child or children under age 13 while you worked or looked for work.
4. Earned Income Tax Credit
To receive an Earned Income Tax Credit, you must have worked but earned less than $51,567 last year. You may receive up to $6,044 if you have three qualifying children.
5. Adoption Credit
To receive the Adoption Credit, you must have paid for certain expenses to adopt a child.
6. Higher Education Credits
To receive a tax deduction from either the American Opportunity Credit or the Lifetime Learning Credit, you must have paid for your own or an immediate family member's higher education. If the American Opportunity Credit is more than the tax you owe, you may be eligible for a refund of up to $1,000.
7. Student Loan Interest
Even if you don't itemize deductions on your tax return, you may receive a tax deduction on a student loan interest.
8. Self-Employed Health Insurance Deduction
To deduct premiums you paid to cover your child under the Affordable Care Act, you must have been self-employed and paid for health insurance. It applies to children under age 27 at the end of the year, even if they are not your dependents.