New Tax Deduction Question

Edit:

Wait are you talking about the dependent tax exemption deduction where you can deduct from your AGI that amount? that is not cash in your hands...it reduces the amount of taxible income which could then be as high as 14,800

What deduction is this...you need to be more specific then just "the new tax deduction"

I have not heard of this...and I would bet if anything that it is 'up to' 3700 depending on income.

But you need to be more specific on the deduction. is it an EIC, Child tax credit, etc.

You still get your standard deduction: $11,600.00 for married, $8,500.00 for head-of-household, or $5,800.00 for single. That amount is subtracted from your adjusted gross income. Then you also get a deduction of $3,700.00 per dependent. That is also subtracted from your adjusted gross income. I have two children and am married so I had a total deduction of $26,400.00 ($14,800.00 *dependent deduction* + $11,600.00 *married filing jointly deduction*).

So if you are married with two children and your adjusted gross income is $45,000.00, for example, you would be taxed on $18,600.00 only ($45,000 - $26,400) not the entire $45,000.00.

Hope this helps.

This really grabbed my attention so I did a little googling - lol - there are two types of deductions - one for children/dependents and one for their care. The child care credit was $3000 per child.
The dependent credit is(was) $1000 per child, but it is based on a formula, so not a straight conversion and if you elect to use this it appears it can reduce claims in other areas. . . not an accountant, but I am going to keep digging. this is pretty interesting
http://taxes.about.com/od/deductionscredits/qt/childtaxcr...
http://www.irs.gov/newsroom/article/0,,id=106189,00.html

I am rather confused by your question. I haven't checked a lot of the changes yet but it sounds like they changed the deduction amount for dependent children?

If so you can't claim a child twice, you file with your spouse and include dependent children. So if you have one child that is three. Two would be four. It reduces your taxable income so no you don't just get the money, you just don't pay taxes on it.

For laughs I googled it. That is the personal exemption, one per person. Is it not new but the amount increased from 3,650 in 2010, next year it will be 3,800. So nothing new guys. :)

A.:

Since your youngest son was born in Korea - you may be able to file any way as the SSN is pending.

The money is deducted from the taxes you paid versus what you owe. You should be able to go on base and have H&R Block (I don't know about Korea, but I know in Beligum and Germany they had representatives there to help service members) and have them do your taxes.

I thought you only had 3 children - not 4. In any case - they money is used as a deduction and will be calculated in the final numbers of your tax return. Do NOT assume you get that money as a return - you need to factor in taxes paid, owed, etc.

ETA: There is a new child deduction that allows for $3,700 per dependent child (to include foster). It is a flat deduction and not calculated at rate - it is a flat deduction.

ETA: I gotcha! I know what your talking about now. This is a standard, right off the top deduction for each member of the family that is automaticallly calculated the minute you/ your tax professional enters dependents and it reduces the amount of money you owe taxes on. Unfortunatly, it's not 14 K in your pocket, per se. It IS in addition to the 1000 per child credit and the child care credit (up to 3000 per child capped at a total of 6000 total if you use child care). Those are just icing on the cake, so to speak!!!

P.S. I messaged you!

I want to know the name of this new tax and when it went/goes into effect because I only got 1000 per child up to 3000 (and I have three). Then, that 3000 got deducted from my AGI and my actual taxed amount went down.

my advice, get turbo tax, and let it do it for you lol!