For so many mothers, the words tax and return fill them with absolute dread every spring. Even Albert Einstein joked: “The hardest thing in the world to understand is the income tax.” Though, with all due respect to the guy who developed the theory of relativity, I’ve got to disagree on that one.
For most parents, filing your taxes really doesn’t have to be all that anxiety producing. So let’s get to the questions I get the most this time of year, and clear up some of the confusion.
Wait, When Do I Go To The Post Office This Year?
Normally, you have to file and pay your taxes on April 15th every year (unless you file for an extension and keep in mind, that’s only an extension to get your paperwork together, not to delay giving the government a check if you owe one). This year though, you get a few bonus days and your taxes are due on Tuesday April 17th, 2012 – because April 15th falls on a Sunday and a holiday called Emancipation Day falls on Monday, April 16th.
But I tell all parents – don’t leave everything until the last minute if you can avoid it. It’s just like with those college papers, remember? People who stay up until 3 a.m. the night their taxes are due, filling in all those pesky little numbers (by hand or on the computer), tend to make more mistakes than those who have a few days or weeks to double or triple check their work.
Do I Have To File Even If My Boss Withheld Correctly?
Unfortunately, yes. The law requires you to file and pay your taxes, and separate penalties and interest accrue on each obligation if you don’t do either of them. But, if your employer withheld the right amount, you shouldn’t owe anything, and if he or she over-withheld all year (which is common), you can expect a refund check from the government (you’re getting your own money back actually, that you’ve been “loaning” Uncle Sam interest free all year!).
We Had A New Baby, Now What?
Great news for anyone who had a baby before December 31st of last year: you get all the tax benefits of having a child for the 2011 tax year, no matter what month you gave birth or adopted your son or daughter. Last February or this past Christmas – it doesn’t make a difference when you file your 2011 taxes. You’re still eligible for the tax breaks I talk about below (provided you don’t make over a certain amount of income).
Having A Baby Can Save You Money
While there certainly are a ton of costs associated with adding a child to your family, luckily, your new addition may actually save you a bundle on your taxes this spring. To start, you can claim a personal tax exemption for all of your dependents in a given year – and that new kiddo gives you another personal tax exemption that reduces your taxable income and lessens the amount of taxes you that you owe.
Depending on your income, there’s also a $1,000 child tax credit for people who’ve had a new baby (whether by birth or adoption, and for any existing children), an adoption expense credit to help offset the cost of adopting a child at any age, and a child care credit if you’re paying for someone to watch your son or daughter while you’re at work. In general, credits are super helpful because they reduce your tax liability dollar-for-dollar, so you definitely don’t want to miss out on any of the ones that might apply to your family.
Be aware though, these kiddie credits can get a tad tricky. I always tell folks to sit down with a tax professional, especially if it’s your first year filing your taxes as a parent.
Most of all, remember to take a deep breath as you approach the April 17th deadline. Like so many of those pesky adult tasks we have on our plate (paying the bills and going to the dentist, anyone?), filing and paying your taxes is never as bad as you think it’s going to be – and then it’s over ‘till next year!