If you’re a parent, you know that the little bundle of joy that makes life so fulfilling is also good at unfilling your wallet. However, there are some costs that you can recover in the form of tax deductions.
One of the most common expenses and also one of the most overlooked is childcare. Those costs can be huge, so you need to make sure that you are tracking the costs and claiming any possible deductions.
Another major cost is child support. In some areas and depending on the agreement with the other parent, these costs can be claimed as a tax deduction as well.
Those apply in most jurisdictions, though as always, tax advice comes with a big disclaimer: Rules vary from place to place and case to case, so use this info as a starting point only, and find specific advice for yourself from the tax authority or an accounting pro.
You can also track other costs that are smaller and don’t count as deductions in many jurisdictions. Things like fitness expenses (sports team fees) or bus passesused for going to school can be claimed in some areas, as can summer camps or school tuitions. Medical costs may also be eligible, so don’t forget about those.
The costs of raising children are not going down anytime soon, so use Wave Accounting to to track all expenses related to your children, and make sure that you invite your accountant to review your transactions so that you can save every penny possible. College tuition is coming sooner than you think.
Wave Accounting provides this information as a guide to get you started. When it comes to actually reporting financial details to the government, you should check with your accountant or reference the rules in your jurisdiction to see how they apply to your unique situation.
The information and tips we’re sharing in this article are meant to be a starting point for your year-end tax prep, so you can be informed and feel confident when working with your accountant. Be sure to check with a tax expert in your country or region for any specific advice you need, as each business (and tax district) is different. As our lawyers would say: “This article is for informational purposes only. It should not be considered legal or financial advice.”