Got a new bundle of joy in your household? Here are opportunities to cut your tax bill as you grow your family.
1. Dependency exemption
Claiming your son or daughter as a dependent will shelter $4,050 of your income from tax in 2016 and 2017.
2. Child tax credit
A new baby also delivers a $1,000 child tax credit, and this is a gift that keeps on giving every year until your dependent child turns 17.
3. Head of household filing status
If you’re single, having a child may allow you to file as a head of household rather than using the single filing status. That would give you a bigger standard deduction and more advantageous tax brackets.
4. Adoption credit
The credit will reimburse you for up to $13,460 in expenses for a 2016 adoption.
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