When It Comes to Tax Time, Who Is A Dependent?
Today is my son’s eighth birthday, and naturally, I spent the morning thinking back to the countless ways he’s enriched my life.
There was that first dependency exemption in 2009. And then that much-needed dependent care credit in 2011. And who can forget the child tax credit of 2014? Great times, all.
In total, that kid has saved me over $10,000 in taxes, and all it’s cost me in return is a few hundred doughnuts and the occasional Lego set. Not a bad deal.
If you’re a little jealous, don’t be; YOU can have a sweet little tax break of your own, and if you plan accordingly, unlike me you can have one that doesn’t require all that annoying parenting.
But be warned, claiming a dependent — and all the ancillary tax benefits that come with it, from the $4,050 deduction to the head-of-household filing status to the earned income, child care, and dependent care credits — is not as easy as it sounds, and certainly not as easy as it should be. Heck, if it were up to me, you’d get a dependency exemption for every kid under a certain age, every parent OVER a certain age, and anyone who lives in your house but doesn’t pull their weight when the bills come due.
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Authored by Tony Nitti, Withum Partner and writer for Forbes.com.
