Jump to content
  • Lisa Niser

    Lisa Niser is a Chicago mom who has been helping families with their taxes and financial planning for over 20 years. She helps many NPN members with their nanny tax needs as well. Visit www.lisaniser.com to learn more about her practice.

    Lisa Niser

    Lisa Niser is a Chicago mom who has been helping families with their taxes and financial planning for over 20 years. She helps many NPN members with their nanny tax needs as well. Visit www.lisaniser.com to learn more about her practice.

    5 tax breaks every parent should know about

    Sign in to follow this  
    Chicago families can get some nice tax breaks if they know what's available to them. Check out how you can save with a child tax credit, dependent exemptions and more.

     

    While it may feel like children require an outpouring of funds, here are several child-related tax breaks that may allow you to save some on your taxes. 

     

    1. Dependent exemption: You are entitled to a personal exemption for each person claimed on your return. For 2017 this means you reduce your taxable income by $4,050 per exemption on your federal return and $2,175 per exemption on your Illinois return. The savings are these amounts times your tax rates. Note that the exemption phases out for higher-income taxpayers on the federal return. For married taxpayers, the phase out starts at $313,800 and is completely phased out at $436,300.

     

    2. The child tax credit: You may be able to reduce your federal income tax by up to $1,000 for each qualifying child under the age of 17. A qualifying child for this credit is someone who meets the qualifying criteria of six tests: age, relationship, support, dependent, citizenship and residence.  

     

    The credit is gradually reduced as a taxpayer's income increases. The phase out begins at the following thresholds and is reduced by $50 for each $1,000 of income over the threshold.

    • $55,000 for married couples filing separately
    • $75,000 for single, head of household and qualifying widow(er) filers
    • $110,000 for married couples filing jointly

     

    3. The child and dependent care credit: If all parents on the return have earned income you can claim a 20–35% credit (based on income) on up to $3,000 of expenses paid for one qualifying person, or up to $6,000 of expenses paid for two or more qualifying persons. Qualifying persons are children under 13. Qualified expenses include day care, nannies, preschool, day camp and aftercare. The name, address and social security number or EIN of the provider are required to claim this credit.

     

    4. The Illinois education credit: You can claim a credit for 25% of your K-12 student’s qualified expenses in excess of $250 up to a maximum of $500 per return. Qualified expenses include tuition, book fees and lab fees paid directly to the school.

     

    5. The IL tax deduction for 529 contributions: Illinois allows a deduction of up to $20,000 for married taxpayers ($10,000 for single taxpayers) contributions to Illinois 529 plans (BrightStart, Bright Directions or Illinois College!). You will save 3.75% (the Illinois tax rate) on whatever you contribute.

     

    As each taxpayer’s situation is unique, please consult with your tax advisor to determine which of these savings opportunities you can utilize.

     

    Lisa Niser is a Chicago mom who has been helping families with their taxes and financial planning for over 20 years. She helps many NPN members with their nanny tax needs as well. Visit www.lisaniser.com to learn more about her practice.

    Related articles:

    Explore Chicago neighborhoods with you kids this summer

    Parents can't slow time down, but they can make family time count

    To the parents addicted to their phones

    Sign in to follow this  

    More related articles

    A child therapist admits to committing these 10 COVID-19 parenting fails

    Show yourself compassion because there is no perfect parent…especially during a pandemic.

    Working mom hacks: Tips and tricks to make your life easier

    We asked our working mom members their top tricks and tips for keeping themselves and their kids happy and sane despite hectic schedules.

    What does Mother's Day mean in 2021?

    Given the challenges for mothers and all caregivers in this pandemic, will it be any different this year?

    How working moms can get involved with their child's school

    Working moms often feel guilty they're not more involved in their child's school. This Chicago mom has ideas on how to get involved while still holding down a full-time job.



  • Join NPN!
    Become a part of our Chicago parenting community. Learn about member benefits and start connecting to other city parents today!

Privacy Policy Membership Terms

© 2021 Neighborhood Parents Network of Chicago

×
×
  • Create New...

Important Information

Thank you for visiting our site. Browsing this site is an acceptance of our We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue. and Terms of Use.