As FDR once said, Taxes are paid in the sweat of every man who labors.

Yeah, but what about the mamas? 😉

It’s tax day, do you know where/what your deductions are? Happy Tax Day, everyone.

I remember way back to my junior year in college when I wrote an article depicting the angst that often goes hand in hand with tax day. I’ll never forget my professor who told me in not so many words that my article sucked.

“Well, Jennifer, not everyone dreads tax day, like you do. I know I don’t. I get a nice refund every year.”

Well, duh. Sure you do.

I was like, what, 21 then? What the hell did I know? I was doing an assignment and was making an association with tax day.

While some may look forward to hefty refunds and even this year’s economic stimulus payments, tax season, much to my former professor’s chagrin, isn’t party time for everyone.

In our former life as DINKs, specifically DINKs without a mortgage, Jeff and I always resented tax season for various reasons. Having to deal with 2 states plus federal taxes is always a chore. Several years before baby came into the equation, we’d joke and say that we should have a kid “to make things easier.” (And then when we wanted a kid, it took us years to finally have him. It’s funny how karma works.)

We got what we wanted, but no, things did get not get easier. This year, in terms of taxes, we finally have a reprieve. His name is Jackson. Ok, so he’s not a reprieve as much as he is a tax “credit.”

But what does all that mean? I’m a word person, ya’ll. Numbers are a different language to me. Thank God my husband is the polar opposite of me: smart and very gifted with numbers.

Still, I want to understand taxes and the significance as new parents. It’s no wonder my article sucked back then. I still don’t know what the hell I’m talking about.

Thus, I set out to wrap my brain around taxes, and here is some helpful information that I found. I know it’s not the most timely, considering TODAY is tax day and all, but perhaps it’ll be of interest for others in the future. (Looking at you, DINK friends)

As your spending skyrockets, at least you can take some solace in a few tax breaks geared for parents.

One that many parents overlook is the ability to sock away up to $5,000 of pre-tax money for child care through an employer-sponsored savings program. Called flexible spending arrangements (FSAs), most medium and large employers offer them.

There is also a child-care tax credit, which you can qualify for if both spouses are working and your child is under age 13. But Uncle Sam doesn’t let you double up on the FSA and the credit. “For most people, it’s not a tough choice – the flexible-spending plan gives you the biggest break,” says Lisa Osofsky, a New York City accountant and financial adviser.

The maximum child-care credit you can claim is $480 if you have one child and $960 if you have two or more children. In contrast, “if you put away $5,000 pretax in the FSA, and you’re in the 30% tax bracket, you’re getting a $1,500 credit,” Osofsky says.

Another big tax perk: The $1,000 annual child tax credit, which applies to children under age 17. Couples filing jointly who have one child and earn no more than $110,000 can claim the full credit.

A tax columnist is fond of pointing out, a tax credit is far more valuable than a deduction because the credit is a dollar-for-dollar reduction of your tax bill.

And Babble did a featured a great article on 10 Tax Tips for Families.

Families can take deductions for: insurance premiums, uninsured medical expenses, treatments not covered by insurance, travel for medical care, medically necessary equipment and more…

Beyond taxes, college savings is huge. I’m so blessed to not have any college loans– starting a life with minimal debt was one of the best gift I could have ever received. Jeff is totally ahead of the game here, considering he took the initiative to start Jack’s 529 when he was a wee baby. Jack’s 529 is through Iowa, which is considered one of the best.

As I read in an article,

“The best time to start is when you child is born,” says Dennis Gurtz, a financial planner in Bethesda, Md. There are a couple of attractive tax-free college savings options:

* 529 college savings plans. You can contribute $25 a month or up to $250,000 each year to these state-sponsored plans. Your money grows tax free as long as it is used for college costs.

* All states sponsor one, and each is managed by a brokerage or mutual fund company. The Illinois plan is run by Salomon Smith Barney, and Maryland’s is managed by T. Rowe Price. No matter where you live, you can participate in any plan and your child can attend any school she chooses.

* The plans invest your money in a portfolio of stocks and bonds that gets gradually more conservative as your child nears college age.

* For information on the performance data on 529 plans, see SavingForCollege.com. (See link in left margin under Related Resources.) For a listing of all 529 plans, check out The College Savings Plans Network Web site. (Also listed under Related Resources.)

* Coverdell education savings accounts. Formerly called education IRAs, these let you contribute up to $2,000 a year in a tax-free accounts. The earnings build up tax-free. There are some income limits, however: $220,000 for couples filing jointly, and $110,000 for singles.

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