Parents can also take advantage of other tax benefits, such as 529 college savings plans where money can grow tax-free and pre-tax flex spending accounts for child care costs.
[Read: 50 Ways to Improve Your Finances.]
5. Buy a home.
Homeowners enjoy mortgage deductions, which can significantly reduce their tax burden, especially if they are in high tax brackets. Frank points out that as taxpayers age, they lose out on more and more tax deductions – the mortgage deduction fades away as homeowners pay off their mortgages, and parents of grown children who are no longer dependents give up those child-related deductions.
That's why Frank encourages people to take advantage of the tax code while they are most able to do so, in the prime of their working careers.