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Mother's Day Tax Tips For Moms
Moms, we know you’ve really been stretched to the limit this past year. Working from home while balancing duties as a schoolteacher, nurse, cook, playmate, and more is no easy feat. So stop, take a deep breath, and exhale. This Mother’s Day, we celebrate you - all the hardworking moms and moms-to-be with a handy list of tax-related benefits for your 2022 tax return, along with some commonly overlooked tips, that come with being a mom:
Newborn medical expenses
Is this your first Mother’s Day? If your child was born in 2022). Eligible expenses include the costs for the birth of your child, well-baby check-ups, and other medical visits for babies and parents. You have to subtract 7.5% of your Adjusted Gross Income (AGI) from your total medical expenses.
New children mean new credits
Having a new child can be one of the greatest tax benefits for you. You are no longer able to claim a dependent exemption, but you may be eligible to claim various child-related tax credits. These credits include the Child Tax Credit, the Child and Dependent Care Credit (commonly referred to as the “daycare credit”), and the Earned Income Tax Credit, which is available for families with an income of less than $59,000.
Adopting a child
If you adopted a child in 2022 you may be eligible for the Adoption Credit, up to $14,890 per child. The child can’t be a stepchild to you or your spouse. If you adopt children considered to be special needs by the local Department of Family Services, your credit is not based on adoption costs. Instead, you are automatically eligible for the full amount of $14,890 per child.
If you are enrolled full-time in an undergraduate or certificate program, you may be eligible for the American Opportunity Credit. This is a refundable credit of up to $2,500 of qualified tuition, fees, and expenses, with 40% of the credit, up to $1,000, treated as refundable. If you take classes at a college or vocational school for any reason including pursuing your graduate degree, work-related, or just for fun, you may be able to claim the Lifetime Learning Credit. This is a non-refundable credit of 20% (up to $2,000) of qualified tuition, fees, and expenses you paid for yourself, spouse, or a dependent. With the Lifetime Learning Credit, your classes do not have to be part of a degree or certificate program.
Selling your home
Whether your family has grown or you find yourself in an empty nest, you may want to move from your current home. One of the best tax breaks for homeowners remains unchanged: Up to $250,000 ($500,000 if Married Filing Jointly) of profit from the sale of your house could be tax-free. Keep the receipts for any home improvements you do, such as installing new carpet, closet organizers, or even new kitchen cabinets. You can include the cost of these improvements in the basis of your home when you sell.
Real estate and personal property
You can deduct up to $10,000 of your real estate and personal property taxes, as well as either your state and local income taxes, or sales taxes. Taxpayers who live in high-income tax or real estate tax areas are often subject to the $10,000 ceiling.
If you volunteered in 2022 for your children’s teams or activities – for example, coaching the cheerleading squad or softball team – you may be able to claim a charitable contribution deduction. Your mileage to and from the volunteer activity is deductible at 14 cents per mile, and out-of-pocket expenses for necessary supplies such as equipment and uniforms are also deductible as charitable contributions. Remember to keep those receipts and a mileage log for all your travel as a volunteer!
Are your children under age 13, and did you send them to a day camp in 2022 while you and your spouse worked? If so, you may be able to claim a credit on your expenses. You may be able to claim a credit of between 20 and 35 percent of these and other daycare expenses up to $3,000 ($6,000 for two or more children) on your income taxes. Make sure you get a receipt from the daycare provider(s) and the day camp.
Remember your filing status
If you are a single mom, don’t forget to file with the correct filing status. You may be eligible to use the Head of Household filing status if you have physical custody of your child for more than half the year, are single, and provide the main support for your household. This will qualify you for lower tax rates, higher credit amounts, and potentially, many other tax benefits.
We know motherhood involves a lot of sacrifices and hard work, now more than ever. You should enjoy the financial benefits that come with being a mom. Whether you’re a new mom, seasoned pro, or empty nester, you deserve a break - and maybe a spa day. Happy Mother’s Day, moms – you’ve earned it!
About the Author
Jo Willetts, Director of Tax Resources at Jackson Hewitt, has more than 35 years of experience in the tax industry. As an Enrolled Agent, Jo has attained the highest level of certification for a tax professional. She began her career at Jackson Hewitt as a Tax Pro, working her way up to General Manager of a franchise store. In her current role, Jo provides expert knowledge company-wide to ensure that tax information distributed through all Jackson Hewitt channels is current and accurate.
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