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If your household is like mine, you’re responsible for gathering the tax documents and keeping up with tax law changes. I mean the do it yourself tax softwares can certainly help with this but the output is only as good as the input so if you’re confused on things, it’s time to talk to a professional.
Before you hit snooze–I know, keeping up with tax laws is boring— there are lots of tax breaks to help soften the financial blow for parents this year. Yep, another perk of being a parent to add to your list in 2022. To access the perks, be sure to file with the right category.
Depending on your type of household – you can file as married filing jointly/separate, as single, or as head of household If you’re a single mom and/or have a qualifying dependent you may lean towards filing as head of household. You pay less in taxes and get larger exemptions and that’s always a good idea.
Now onto the more juicy stuff–there are 3 tax credits I want you to explore: Earned Income Tax Credit, Child Tax Credit and the Child and dependent care credit: Earned Income Tax Credit: this is a tax credit for low and moderate income working parents. It’s “refundable” so you get some benjamins back even if you don’t owe taxes.
The max you can get depending on how many rugrats I mean kiddos you have around $6,700 for 2022. Child Tax Credit – Depending on how much you earn and how many children you have claimed as dependents, you could get up to $2,000 for kids under 17 with this credit.
And last but certainly not least – the Child and dependent care credit helps you pay for childcare and you could get a maximum of $4,000 back depending on your income. And it’s refundable!
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Rianka R. Dorsainvil, CFP®️ is the Co-Founder and Co-CEO of 2050 Wealth Partners a virtual, fee-only comprehensive financial planning firm dedicated to serving first-generation wealth-builders, entrepreneurs, and thriving professionals. Rianka also hosts 2050 TrailBlazers, a podcast aimed to address the lack of diversity in the financial planning profession by engaging industry experts and leaders in conversation.
As an award winning successful, millennial Certified Financial Planner professional, Rianka offers a unique perspective not only on the current state of the financial service industry, but on how to stay relevant in an ever-changing world.
Rianka serves as a member of CNBC’s Digital Financial Advisor Council and CFP Board’s Diversity Advisory Group, is a Forbes Personal Finance Contributor, and has been recognized for her accomplishments and leadership within the industry by leading publications and organizations such as Investment News’ inaugural 2017 Women to Watch Rising Star and Wealth Management’s Ten to Watch in 2018. She has been published in PBS NewsHour, Forbes, USA Today, Black Enterprise, CNBC, Women’s Health, and more.