3) Parents Take Advantage Of Multiple Tax Breaks
Being a parent can offer the Earned Income Credit to qualifying tax payers, but it can also make you eligible for dependent care accounts, which are essentially pretax savings accounts that allow you to invest up to $5,000 for child care costs. Qualifying for this dependent care accounts is fairly easy and just requires to you be a parent who is working full-time or going to school full-time. Use this account with caution, as any unspent savings at the end of the year will be lost. One other tax benefit of being a parent is the child tax credit, which offers up to $1,000 to qualify-ing parents, especially those with low income. Take advantage of this credit while your kids are young, because you won’t be able to claim it once they can no longer be considered dependents.