You’re probably not thinking about taxes now that you’ve got a baby on the way. But babies bring tax deductions, and who doesn’t want get all the tax deductions they’re entitled to, even if the new tax law means you may pay less in taxes in 2018.
Here’s a look four unexpected the tax deductions and credits available to those who are expecting in 2018.
1. Pregnancy Test Kits.
You can include the cost these items in your medical expense deductions. For medical expenses to be deductible, you have to itemize your tax deductions, and your medical expenses have to exceed 7.5 percent of your adjusted gross income.
2. Nursing Supplies
That’s right, nursing moms can include the cost of breast pumps and supplies in their medical expense deductions. Lactation expenses are also deductible as are laboratory fees that may be a part of your medical care.
3. Child Tax Credit
Under the new tax law, the child tax credit has doubled to $2,000 per qualifying child. And, unlike a tax deduction, which reduces the amount of your income subject to tax, a tax credit reduces your tax bill dollar for dollar. Not bad, right?
4. Education Savings
The new tax law lets parents save tax-free for their child’s education. Under the law, you can use up to $10,000 per child from a 529 plan to pay qualified expenses for elementary and secondary school and home school. The 529 plans can also be used to pay for college.
These are just a few of the tax deductions and credits available to families in 2018. But as your child grows, the tax code is likely to change. In fact, many of the deductions and credits available today as part of the new tax law are set to expire after 2025. That’s why it’s always good to work with a tax professional whose job it is to keep up with the changes to the tax code.
That way you can spend time enjoying the wonders of parenthood while someone else worries about the taxes.