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Understand the income tax impacts of having a child

Life’s Financial Journeys

Heading Off to College
Getting Out on Your Own
Blending Two Lives
Having a Child
Emptying the Nest
Entering Retirement
Death of a Life Partner
Military Life

Children cost money; there is no way around that. However, both federal and state laws provide for mechanisms that reduce the impacts of income taxes for parents.

The following resources may assist you in understanding the income tax impacts of having a child:

IRS Facts About the Tax Exemption for Dependents

The Child Tax Credit Explained

IRS Instructions for the Child Tax Credit

Taking the Earned Income Tax Credit

Comprehensive List of Tax Aspects of Having a Child

Taking the Adoption Tax Credit

Having a Child Tasks

1. Protecting against risk
2. Updating your estate plan
3. Arranging child care
4. Revising your spending plan
5. Saving for your child’s education

Revising your spending plan Subtasks

1. Set financial goals
2. Determine your income and expenses
3. Develop a spending plan
4. Understand the income tax impacts of having a child

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