7 Essential Tax Credits and Deductions Every Parent Should Know
Published Date: September 15, 2025
Published By: Jac Cantos, Upcloud Accounting
Raising kids is expensive, but tax season offers opportunities to save! UpCloud Accounting highlights seven key tax breaks for parents in 2025, helping you navigate the complexities and maximize your savings.
Navigating Tax Breaks for Families
Understanding which tax benefits you qualify for can be tricky. Filing status, itemized deductions, and income levels all play a role. Whether you're filing yourself or using a professional, knowing these tax breaks can help you save money.
7 Tax Breaks for Parents in 2025
Earned Income Tax Credit (EITC):
Families earning under $68,675 in 2025 may qualify.
The credit can be worth up to $8,046 based on income and the number of qualifying children.
It's a refundable credit, meaning you can receive a refund even if you owe no taxes.
Child & Dependent Care Credit:
If you pay for childcare for children under 13 so you can work, look for a job, or attend school, you may be eligible.
Covers expenses like nursery school, preschool, before/after-school care, day camps (not overnight), and nanny care.
The credit can be up to 50% of your expenses (up to $3,000 for one dependent or $6,000 for two or more).
Child Tax Credit (CTC):
Worth up to $2,200 per qualifying child if your MAGI is below $400,000 (married filing jointly) or $200,000 (other filing statuses).
The Additional Child Tax Credit (refundable portion) can be worth up to $1,400.
Medical and Dental Expenses:
You can deduct unreimbursed medical and dental expenses exceeding 7.5% of your AGI.
Eligible expenses include diagnosis, treatment, prevention of disease, medical/dental insurance premiums, and transportation costs.
Adoption Credit:
Covers up to $17,280 in adoption expenses for 2025.
You can claim the full credit if your MAGI is below $259,190.
A portion of the credit (up to $5,000) is now refundable.
Qualified Tuition Programs (529 Plans) and Coverdell Education Savings Accounts:
Offer tax benefits for college savings.
Distributions and earnings are generally tax-free when used for qualified education expenses.
Student Loan Interest Deduction and Education Tax Credits:
May qualify for the student loan interest deduction, American Opportunity Credit, or Lifetime Learning Credit.
Helps offset the cost of higher education.
Navigating the complex world of family tax benefits can be overwhelming. UpCloud Accounting provides expert guidance to help you identify and claim all the tax breaks you're entitled to. Contact us today for personalized assistance!
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Disclaimer: This article or blog is only for general knowledge and guidance and is not a substitute for an expert opinion. For technical advice, please consult your tax / legal advisor for your specific business concerns. For comments, suggestions, and feedback, feel free to email us at [email protected].
