Here are some of the benefits to which you are entitled as a parent:
1. The Basic Exemption. You are generally eligible to take a deduction off your income for each dependent child in your household under age 19 (age 24 if he or she is a full-time student, or any age if disabled). The amount of the deduction for 2012, reports the IRS, is $3,800, up $100 from 2011.
2. The Child Tax Credit. For each child age 17 or younger, you can claim a $1,000 credit in 2012 (the same as last year), provided your income does not exceed certain amounts. Note: A tax credit is deducted from your tax, not your income, so it can lead to big savings.
3. Child Care Credit. You may qualify for a child-care income-tax credit of up to $3,000 ($6,000 for two or more qualifying dependents) for day-care or baby-sitter services.
4. Educational Tax Credits. Among these, families that qualify for the Hope and American Opportunity tax credits for college students can deduct up to $2,500 from their taxes in 2012.
5. Deductions on Educational Related Interest. Interest on loans is deductible up to $2,500. There is an income limit, though, to qualify for the deductions.
6. The Adoption Credit. If you adopt a child, you can claim an adoption tax credit, if applicable, for a child under 18. The maximum amount for 2012 is $12,650, down from $13,360 in 2011, reports the North American Council on Adoptable Children.
Note: These are just some of the tax breaks from which you can benefit as a parent. Keep in mind that eligibility is often subject to fine-print details. So, before you act, check with your accountant (and, if appropriate, your attorney) to make sure you are eligible for any/all of the above tax breaks and to make sure you are not overlooking any.
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