We can always count on Julie Forbes to bring the intelligent and well-researched pieces to this blog. She doesn’t disappoint today! I had NO idea we could write off all the money Scott spent on the little league team last year!
Who says being a stay-at-home parent doesn’t pay the bills?
Everyone. Because it doesn’t.
But, that doesn’t mean you can’t claim some tax deductions. All parents, whether you stay-at-home or are working, have plenty of opportunities to itemize.
You probably already know that each one of those money-sucking life forms you pop out grants you another ~$1,000 tax credit each year, and you get to add another exemption.
But there are quite a few others that you may not be aware of.
Here’s a breakdown of some parenting chores, and how they can help you at tax time:
Your boobs are tax deductible! Ok, so maybe your boobs aren’t tax deductible, but if your breasts are milk-makers, they’ve now become money-makers. Just recently, the IRS softened its stance and said that even though breastfeeding isn’t “medically necessary,” (meaning, it doesn’t require a prescription) it can be considered deductible.
You may know that health-related deductions typically fall into a category that doesn’t help you out unless you have medical deductions that add up to more than 10% of your annual income. That’s usually a pretty high benchmark for people. Don’t count it out just yet though because, remember, in the year that you deliver a baby, your medical expenses are probably higher than most years, so you could qualify.
And, if you don’t, Chris Williams, Managing Partner of Green Valley Taxes Inc., in Napa, California says, “Frankly, I think if you work and you have to pump milk because you’re not with the baby, I think you could take that deduction in a different part of the Schedule A which is subject to the 2% floor of the AGI,” (adjusted gross income, or your total salary).
What he’s saying is that because the IRS has announced that it will now consider breast-feeding as a health deduction, the logic would follow that if you are breastfeeding to allow you to work, than its now acceptable to claim it as a work expense.
And, you can also assume that anything associated with breast pumps would also be included (the IRS doesn’t exactly elaborate on these subjects). But, logic would tell you that breast pumps don’t just fall into this category (as long as you didn’t receive it for free from your health insurance company), you could also claim all of the pieces of equipment you need to make breastfeeding happen: breastshields, tubing, milk storage containers, a sanitizer, bottles, etc.
If you’re thinking, “Man, I wish I would have known about this when my child was a baby!” you can always go back and file an amended return for the past 3 years. It’s not too late to make those claims.
Your regular load of food-stained onesies doesn’t count as a deduction, but if you or your spouse are required to wear a uniform to work (and, no I don’t mean that pair of yoga pants you wear everyday) that counts as a deduction. A “uniform” is a set of clothing that you wouldn’t wear outside of work. Think: a firefighter, a police officer, or even someone who wears medical scrubs.
These are all considered uniforms, so not only is the cost of these items deductible, but so is the upkeep or laundering of these items. If you get them dry cleaned, hemmed or pressed, save the receipts. And, if you do the laundry at home, add up the water, electricity and detergent that it took to keep that uniform clean throughout the year.
What exactly qualifies as a uniform? Again, the IRS isn’t really big on details, but Williams says, for example, he would consider the dress clothes a doctor wears underneath his or her white coat to be a uniform, if the doctor changes clothes before they leave work. Williams says, “Because it’s a medical situation and there are real concerns of germs, the types of clothing you’re wearing underneath is considered a uniform because you’re concerned about cross-contamination.”
If only every grocery store run could be considered a deduction, it would take away the pain of the large bill at check-out, but that’s not the case. But the food you buy that is considered, “medically necessary,” is. For example, if you are breastfeeding and having trouble keeping up your supply, whatever the doctor recommends to help increase your supply would be considered medically necessary. Or, if your child’s doctor recommends certain foods be added to their diet for health reasons, those too would be considered deductible.
(And, no, the wine you need to maintain your sanity does not count.)
Who doesn’t love cleaning out the toy room, and getting rid of some of the junk? Instead of handing it to a neighbor or friend, donate it to a charity, and watch the savings pour in. “You’d be surprised how much that adds up by the end of the year,” says Williams.
It’s one of the few deductions that is not dependent on how much money you make.
Williams recommends that you don’t just get a receipt from the organization, but also take a picture of the pile you’re donating. But, Williams says, “Don’t let a lack of receipt completely blow you out of the water with a deduction. You only need a receipt if you’re challenged and audited.” Williams goes on, “If you made the donation, you’re entitled to the deduction. Claim it.”
Coaching the Team
If you’re the one who got talked into coaching the little league team, you’re in luck! You can’t deduct your time, but you can deduct all of the expenses that go into it. If you need to buy any balls, helmets or bats for the team, those are all tax-deductible. All of the miles you travel to practices and games are also deductible. And, if you’re the team mom, the snack you buy is tax deductible.
You can’t just form a baseball team with the neighbors and write it all off though; this does have to be with a qualified organization.
Most families probably know that if both parents are working, or looking for work, they can claim their childcare expenses. Daycare or nanny care probably comes first to mind, but, did you know this also extends to after-school activities, summer camps and preschools? This isn’t a tax deduction, it’s a tax credit, which means, money back in your pocket.
You’re allowed to claim up to $3,000 for one child and up to $6,000 for two or more children.
All the Single Ladies (and Guys)
If you’re a single mom or dad, you will get a big tax bump because you’re not considered “single” any more, but you’re now the “head of the household.” And, that will bring you into a totally different tax calculation.
Hopefully, this helps take away some of the pain come tax time.
Do you have any other parenting tax deductions to add? Please share!
Of course, we are not actual tax professionals and we can not guarantee the accuracy of anything in this post. Please consult your own tax professional if you have any questions.