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4 Things New Parents Need to Know About Taxes


Babies and taxesBecoming a parent is one of the biggest transformations you'll ever go through. As you consider nursery-room renovations, midnight feedings, diaper changes, and the other challenges of parenthood, probably the last thing on your mind is the impact that having children can have on your income taxes.

Fortunately, when it comes to taxes, the news for parents is generally good.

Here's a brief look at some of the ways that having children can help you save on your tax return.

Motley Fool contributor Dan Caplinger has enjoyed the tax and other benefits of his daughter for seven years. You can follow him on Twitter here.

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Cities with the Lowest Tax Rates

The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Tax Deductions for Voluntary Interest Payments on Student Loans

Most taxpayers who pay interest on student loans can take a tax deduction for the expense ? and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary.

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Responsible adults typically have two or three children while the dirty animals on welfare sire seven or eight. Reson for the difference, the scum on welfare get it all paid for by the rest of us. The more they sire the more we pay. While responsible adults have to pay for their children, the scum on welfare get everything for free.

June 18 2012 at 4:08 PM Report abuse rate up rate down Reply

how silly and awkward !
simply apply for an earned income tax CREDIT the exact same way the ILLEGALS do and CLAIM YOUR DEPENDENTS AND GET A CHECK.

June 18 2012 at 3:25 PM Report abuse rate up rate down Reply