While your kids may give you gray hair, raise your blood pressure and often cost a fortune, take a deep breath. Even the most devilish kids still look adorable in footie pajamas and at tax time, they actually can save you money.
Uncle Sam gets it -- it's hard raising kids. So he offers a bunch of deductions and credits that parents may qualify for.
Single parents, too. For instance, if the kids live with you and you pay the majority of your household's costs, consider filing as Head of Household, as opposed to single, reminds Cari Weston, director of tax practice and ethics at the AICPA. The tax rates are much more beneficial.
And with modern families living in all different places and situations -- e.g. a young couple with a newborn living with their parents or kids who split time with their parents -- it is important to look at the whole picture to determine what's best taxwise. So depending on the household's finance's, it may make sense for a grandparent to take the baby as a deduction this year.
Just be open-minded as you try to keep your hard-earned money in your family's pockets.
Because as long as they're not speaking, yelling or throwing things, those kids are darn cute.
And here are ten more reasons to love them.
Editors' pick: Originally published April 13.
1. Dependent Deduction
In 2016, you can claim a $4,050 exemption for each qualifying child, which basically means that you provided more than half of that kid's support and that the child lived with you more than half of the year and was under 19 at the end of 2016 (or under 24 and a full-time student for the year).
So that could include your child or stepchild, foster child, sibling or step-sibling or descendants of any of these, such as your grandchild. In addition, babies born at any time in 2016 are new dependents as well, says Jackie Perlman, principal tax research analyst at H&R Block.
Like all deductions, there is a phase out, which means the deduction decreases as you make more money and the rules get funky for grandparents, so talk to a pro.
Check out IRS Publication 501, Exemptions, Standard Deduction and Filing Information for more info.
2. Child Tax Credit
You also may be able to claim the Child Tax Credit for each of your kids that were under age 17 at the end of 2016.
There are a bunch of tests you need to meet, but again, you need to supply more than 50% of support to your qualifying child.
The credit can be worth as much as $1,000 per kid for 2016 and phases out when a married filing jointly couple's adjusted gross income hits $110,000. It was originally created to offset the many expenses of raising children, and while we all know that $1,000 is a drop in the bucket, take it anyway if you can.
If you don't get the full $1,000 credit, you may be eligible for the Additional Child Tax Credit. For more information, see the instructions for Schedule 8812, Child Tax Credit and Publication 972, Child Tax Credit.
3. Child and Dependent Care Credit
If you pay someone to care for your child or children under age 13, so that you could work or look for work, you may qualify for this credit, which maxes out at $600 for a single kid.
Expenses include daycare, day camp or any activity that they are in so you can work.
Big note, though: "You may be much better off contributing the full $5,000 to your dependent care account at work if it is offered," says Weston. Then that $5,000 comes out of your wages pre-tax.
Even better, if you spent more than $5,000 on dependent care expenses, you may qualify for both, so talk to your tax preparer and check out Publication 503, Child and Dependent Care Expenses.
4. Earned Income Tax Credit
If you earned less than $50,270 last year, you may qualify for EITC.
5. Adoption Credit
If you adopted in 2016 - congratulations! Even better, you may be able to take a tax credit of up to $13,460 for some of the expenses you incurred to adopt your little bundle of joy.
"Know that you can't get the credit if you adopted your spouse's child," says Perlman. That doesn't count.
So if you're thinking of it, maybe adopt the child before you remarry?
IRS Form 8839, Qualified Adoption Expenses is a good resource.
6. Child Support from Divorce
If you receive child support from a divorce, you will not owe tax on it. And the person who pays the support will not owe taxes either, presuming this is all properly stated in the divorce decree.
7. Exchange Students
If you kindly took in exchange students, you may be able to deduct $50 a month as a charitable contribution.
Talk to your preparer; we get it's not much, but take it anyway.
8. Higher Education Credits
There are two credits to help alleviate the costs of higher ed. The American Opportunity Credit (AOC) is mainly for kids going from high school to college and the Lifetime Learning Credit (LLC) is really to help people going back to school or taking courses at night.
You can qualify for either or both. The AOC maxes our at $2,500 per kid, whereas the LLC peaks at $2,000. IRS Publication 970 - Tax Benefits for Education will help.
9. Student Loan Interest Deduction
You may be able to deduct the interest you paid on a qualified student loan.
The cool part here is you can get this deduction even if you do not itemize your deductions, because it goes on the front page of your Form 1040, says Weston
The bummer is that there's a married penalty here. So you get a $2,500 deduction as a single person or and the same amount if you're married filing joint, says Weston.
10. Avoid The Kiddie Tax
If your kid was under 18 in 2016 (or 24 if she was a student) and lucky enough to have more than $2,100 in investment or other unearned income, you have to report that amount on your return.
"The original idea was to keep wealthy parents from transferring assets to the kids so they could be taxed at lower rate," says Perlman.
So to avoid that extra tax hit, look for smarter ways to pass money to your kids. Consider 529 College Plans or custodial accounts like UGMAs (Uniform Gifts to Minors Act) or UTMAs (Uniform Transfers to Minors Act).
Editors' pick: Originally published March 15.