Tax Deductions for Parents

Get the most out of your refund with special deductions for parents.tax forms image by Chad McDermott from Fotolia.com

Many parents, along with everyone else who files taxes, are looking for extra deductions allowing them to get as much money back from the IRS as possible. Parents with one child or more can qualify for deductions that will bring in a bigger refund, from ordinary expanses that range from the cost of day care to educational expenses. Parents who have adopted a child can qualify for special deductions, as well.

Child Care

If you pay someone to watch your child while you go to work, you can claim the fees on your taxes. Keep excellent records of your payments, both for your benefit and that of the babysitter or daycare provider. Pay by check as one record of payment. You can also keep spreadsheets or some other form of computer records that you can easily print out at tax time. Give all of this information to your tax preparer. If you're filling out your returns on your own, follow the directions for child care expenses on your tax form.

Subtract the cost of your child's education from your federal income taxes. For example, if your child receives a scholarship, it can be tax free. If you have set up a savings account for your child's education, you can take a tax deduction for this. Since education tax credits vary from tax year to tax year, check with your tax preparer or contact the IRS directly for current eligible types and deductible amounts of education expenses.

The Child Tax Credit is available to parents whose legal child or children, either through birth or adoption, live with them for at least six months out of the year and be your legal child. The child must be a citizen of the United States and under the age of 17. You may also be eligible for an Extra Child Tax Credit up to $1,000, depending on how much you received for the Child Tax Credit.

If you adopted a child within the tax year, you may be eligible for an adoption tax credit of up to approximately $12,000. You may be able to take credit for expenses paid out the previous year if the adoption finalized the current year. You can claim some of the expenses for the adoption itself as well as extra deductions if the child has special needs. As with many tax credits, you must meet special qualifications to claim those deductions. Check with a professional tax preparer for information on current laws and requirements.