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Tax Insight: For Tax Year 2014 and Beyond, THIRD EDITION by M.Casey Murdock

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CHAPTER 28

Your Children

Kids Aren’t as Taxing as People Claim—In Fact, They’ll Lower Your Taxes Quite a Bit

People seem a little shocked when they learn that I have eight children. Sometimes I joke that I have a lot of kids because they are such a great tax write-off. Although there is no truth in the joke in regard to why I have eight children, it is true that kids provide some great tax benefits.

The first tax benefit that comes from having dependent children in the home is that you receive an additional exemption for each child, which automatically reduces your taxable income by $3,950 per child (see Chapter 4 for details). Then the Child Tax Credit and any other applicable credits kick in to bring you even greater tax savings. With all ...

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