Life Event: You Had a Baby!
The next life event we are exploring is having a baby and how that impacts your tax life. Most parents will tell you that having a child is expensive. According to the U.S Department of Agriculture’s most recent study, the average cost for a middle-income, married couple to raise a child is $233,610. And that is not including potential college expenses. But the good news is you’ll get some relief on your taxes!
A birth on the last day of the year provides a tax benefit for that entire year. After you have a baby, your tax life will change drastically from now on. Tax benefits include:
- New exemptions
- Higher deductions
- Tax credits
In addition to these benefits, our latest COVID-19 Relief Bill blog outlines the additional Child Tax Credit & Childcare Tax Credit that parents may be eligible for in 2021.
Have questions? We are here to help determine the best filing option for your tax situation.
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About the Author: Shelly Spata, CPA
