If this is your first year as a foster parent you may have many questions regarding your taxes. There is different information out the for how to claim the child(ren) you are caring for. One of the biggest tax changes for you may be keeping track of various expenses including mileage that can help reduce your taxable income.
Another expense is getting your home ready for the child(ren). Whether it be a crib, new bedding car seat, stroller, age-appropriate toys, or even toddler-proofing your home you need to keep track of these expenses. These additional costs are may be deductible. Keep track of diapers, special food (toddler snacks or food allergies) baby formula, sippy cups or any costs spent out of pocket for which you are not directly reimbursed.
Another item to track is your mileage to doctors, counseling, any other prescribed activity for the child. Also keep track of mileage to court, social worker or parent meetings, and foster care classes. If you didn’t keep track at the beginning you can use your calendar where you listed your appointments and figure out the mileage. Even mileage to the child school if your other children do not attend that school can be deductible. A friend of mine has 3 bio-children and 1 foster. Last year every child went to a different school due to their ages. One was in middle school, one was in a duel language program that begins at kindergarten, their youngest was in pre-school and the foster was enrolled in the local public school. The mileage from the one school was only 1⁄2 a mile but 2 times a day for 180 days ends up being a minimum of $97 mileage deduction.
The examples above are not inclusive of all the deductible items of foster parents. There are other items you are paying for that may be deductible, bring those in questions to your tax appointment and one of our tax professionals can help you determine if it is deductible and how we can help you reduce your income tax.