Don't Mess With Taxes

Father's Day is Sunday, June 15.

Millions of us will celebrate the importance of fatherhood, and honor the special men in our lives. This includes father figures, such as grandfathers, uncles, siblings, and friends.

The U.S. Census Bureau says there are an estimated 72 million fathers across the United States, with 29 million of those fathers also being grandfathers.

Gifts for the many different dads: Dads are a diverse lot, so the range of gifts that will be presented go well beyond the stereotypical necktie. My dad was an oilfield worker, and the only time I ever saw him in a tie was at my wedding. I didn’t ask him to wear it, but I’m sure my mother was influential here.

The key to any good gift is one that the recipient really wants. For some fathers, that's as simple as a hug or not groaning at his dad joke.

If you’re still looking for something he can unwrap, check out these tech gifts, presents for DIY dads, and last-minute gifts that will arrive on time.

Dads by the numbers: Regular readers of the ol’ blog know that I usually highlight a By the Numbers figure on Sundays. But since a lot of y’all might be busy this June 15 honoring your father, I’m moving the feature up a few days, thanks to Census Bureau data.

Below are this week’s early father-related numbers to go along with the earlier cited 72 million U.S. dads and 29 million grandfathers.

• 24 million: The number of fathers living in opposite-sex married-couple family groups with children younger than age 18 in 2023.
• 2 million: Of the about 10 million parents living with their children younger than 18 (with no other parent living with them), 20 percent (2 million) were fathers.
• 231,000: The estimated number of stay-at-home dads in 2023.

In addition, federal data show that today’s fathers are more comfortable taking parental leave when a new family member arrives.

Sixty-six percent of fathers who had their first child between 2016 and 2020 took time off work to be with the infant. That’s up significantly from the 14 percent of fathers who had their first child in 1980 or earlier and took parental leave.

Tax help in caring for families: The added help from a spouse or partner when families grow is always welcome.

Uncle Sam wants to lend a tax hand, too. Below are some family-friendly tax breaks for qualifying dads (and moms).

• The Child Tax Credit (CTC) is worth up to $2,000 per qualifying child for the 2025 tax year. As a tax credit, the CTC offsets dollar-for-dollar any tax you owe. And up to $1,700 is refundable, meaning you can get it as a refund if you don’t have any tax to offset, if you can claim the Additional Child Tax Credit.
• The Adoption Tax Credit covers up to $17,280 in adoption expenses for 2025, depending on your modified adjusted gross income (MAGI). You can claim the full credit if your MAGI is less than $259,190 in 2025. The Adoption Credit amount starts to phase out if you make more than that.
• The Earned Income Tax Credit (EITC) is a great, but too often overlooked, tax benefit for lower-earning workers. Eligible EITC taxpayers with three or more children could qualify on their 2025 tax return for a credit of $8,046. Lesser credit amounts are available for smaller families.
• The Child and Dependent Care Credit can help pay for a portion of child-care expenses. The care costs are relatively small, up to $3,000 for one child, of as much as $6,000 for two or more children. The expenses also translate respectively to tax credits of $1,050 and $2,100. But as all parents will attest, every bit of child-related financial assistance is welcome.

There also are several tax-favored benefits for parents who want to save for their children’s educations, both K-through-12 and college. These include Coverdell education savings accounts, 529 plans, the American Opportunity and Lifetime Learning Credits, and the above-the-line tax deduction for student loan interest.

New family tax breaks under consideration: The Republicans’ new One Big Beautiful Bill (OBBB) also includes some family-related tax benefits.

The House version of the bill would temporarily increase the Child Tax Credit from $2,000 to $2,500. The change would be effective for the 2025 through 2028 tax years.

The OBBB also would create a new financial account, Trump Savings, for infants and children younger than eight.

It’s unclear whether these proposals will make it into the final bill. The Senate must sign off on the OBBB that cleared the House last month. The upper chamber is making some changes to the bill, which reportedly will be released later this week.

So, keep an eye on Capitol Hill and here for reports of what tax provisions will be in the final comprehensive legislation.

And when it’s time to claim tax breaks available to families, all fathers (and mothers) should take every single one for which they qualify.

You also might find these items of interest:

• 6 family-friendly tax credits
• Determining child-related tax breaks when you're divorced
• Childcare tax credits for both employers and working parents

Advertisements

🌟 Search Amazon Tax Products 🌟
The text link above is an affiliate ad. If you click through and then buy a product, I receive a commission.