Your little bundle can save you a bundle
NEW YORK - Children can bring you a lot of joy . . . and a lot of bills. The good news is that at tax time, they can also save you some money. Mark Steber, vice president of tax resources at Jackson Hewitt Tax Service, reminds parents that childr...
NEW YORK - Children can bring you a lot of joy . . . and a lot of bills. The good news is that at tax time, they can also save you some money. Mark Steber, vice president of tax resources at Jackson Hewitt Tax Service, reminds parents that children of all ages can bring a range of credits and deductions on parents' 2006 income tax returns:
-- If you had a baby in 2006, don't overlook the medical deductions available, such as for labor and delivery room costs, mileage to the hospital, prenatal doctor visits, hospital nursery fees and baby immunizations.
-- Parents who adopted a child last year can get a tax credit of $10,960, which is allowed for qualified expenses including adoption fees, court costs, attorney fees and travel costs related to adopting a child.
-- Reduce the federal income tax you owe by up to $1,000 for each qualifying child under the age of 17 through the Child Tax Credit.
-- Did you pay child-care expenses for a dependent child younger than 13? You can get up to a $2,100 credit (for multiple dependents).
-- Kids in college? You may be eligible for the Hope and Lifetime Learning Education Credits. With the Hope Credit, you can claim up to $1,650 for freshmen and sophomores for two years. The Lifetime Learning Credit provides a tax credit of up to $2,000 per family for anyone in college and is available for all years of postsecondary education.
If you took out a student loan, up to $2,500 of the interest is deductible.