Once Congress and the Executive Branch decided the tax code was for more than collecting money to fund the government it opened the door to understanding how the rules impact parts of your situation. One of the most popular areas to understand are taxes and your children. Here are some things to consider.

• Start a 529 education savings plan. 529 education savings plans are a great way to kick off the baby’s savings for future educational costs. These plans offer investments that grow tax-free as long as the funds are used to pay for eligible education expenses (including elementary and secondary tuition). States administer these plans, but that doesn’t mean you are stuck with the plan available in your home state. Feel free to shop around for a plan that works for you. Starting to save early, maximizes the amount of tax-free compound interest you can earn in the 18+ years you have before kids go to college.
  
  Bonus tip for family and friends: Anyone can contribute up to $19,000 to the plan in 2026 for each child! In addition, there is a special provision for 529 plans that allows five years worth of gifts to be contributed at once — a great estate-planning strategy for grandparents.
  
  
• Update Form W-4. Every year, you need to review your tax withholdings and this is especially important if you have dependents. Remember, the birth of a child brings new tax breaks, including a $2,000 Child Tax Credit, along with the Child and Dependent Care Credit for childcare expenses. These credits can be taken advantage of now by lowering tax withholdings and increasing take-home pay to help cover the cost of diapers and other needs that come with babies and children. On the other side of the coin, these benefits fall away as your kids grow older. The Dependent Care Credit is for children under the age of 13 and the Child Tax Credit is available for kids under the age of 17. So plan accordingly.
  
  
• Prepare for medical expenses. Having a baby is expensive. So is watching your kids grow up! Fortunately, there are ways to be tax smart in covering the predictable medical and dental expenses. The first thing to do is try to pay for as many out-of-pocket expenses with pre-tax money. Many employers offer tax-advantaged accounts such as a Health Savings Account (HSA) or a Flexible Spending Account (FSA). So check this out and fund these accounts as much as possible. And while it’s more difficult to claim medical expenses as an itemized deduction, it’s impossible to do so if you don’t keep receipts.
  
  

Having a kid can be expensive. Schedule a tax review today to make sure you’re getting all the child tax breaks you deserve!