Raising a child can cost a lot of money, so parents will want to take advantage of every tax break they can get. Fortunately, the IRS allows parents to claim several tax breaks based on their child care expenses. The key is learning which deductions you are eligible to claim. Here are four tax tips for parents who want to reduce their tax liability!

1) Having a Child Gives You an Instant Tax Break

The IRS allows taxpayers to claim a dependent exemption for each qualifying person in the household. In general, this exemption is available for any individual who lives inside the home and is financially dependent on the taxpayer. This applies to children as well, so you can claim one for each of your children.

The dependent exemption is good for an automatic deduction of over $3,900 per person, so don't forget to claim it if you're eligible! In order to claim the exemption, your child must be aged 19 or younger or aged 24 or younger if he or she is a full-time student.

2) Take Advantage of the Child Tax Credit

The Child Tax Credit is worth $1,000 for each child aged 17 or younger who is a qualifying relative. Unlike the dependent exemption, the Child Tax Credit is used to reduce the amount of tax owed directly. In some cases, the excess credit that is unused can be refunded.

As an example, if you owe $250 in tax and you qualify for the Child Tax Credit, your tax liability will be reduced to zero. In addition, depending on your income threshold, you may be eligible to receive the remaining $750 as an Additional Child Tax Credit refund.

3) Save Your Child Care Expense Receipts

The cost of child care and baby-sitting may also be used as a tax break. Under the Child and Dependent Care Credit, you are allowed to claim up to 35 percent of your eligible child care costs up to a total of $3,000 for one child or up to $6,000 for two children or more.

Eligible costs may include fees for day camps, baby-sitting, nanny care and even medical caregiver costs for a disabled dependent. In order to claim the credit, you must be either working or looking for work and your child must be younger than age 13. If your child is a disabled dependent, there is no age limit.

4) Claim Your Adoption Expenses

Adoption fees can be extremely costly, so the IRS allows taxpayers to claim a tax-free reimbursement for adoption expenses. If your employer does not reimburse you for your adoption expenses, your tax-free reimbursement may be worth up to $12,150. Adopted children also qualify for all of the above child tax breaks, including the Child Tax Credit, the dependent exemption, and the Child and Dependent Care Credit.

When tax time rolls around, be sure to take advantage of these four tax tips for parents. Claiming the dependent exemption, the Child Tax Credit, the Child and Dependent Care Credit and an adoption expense reimbursement can help you get a bigger refund next year!