CHAPTER 1 You and Your Family

Do the old clichés still ring true? Can two still live as cheaply as one? Are things really cheaper by the dozen? For tax purposes, there may be a penalty or bonus for being married versus single, but there are certain tax breaks for building a family.

This chapter explains family-related tax benefits, such as exemptions and tax credits related to your children and the consequences of marital dissolutions. For more information on these topics, see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information; IRS Publication 503, Child and Dependent Care Expenses; IRS Publication 504, Divorced or Separated Individuals; IRS Publication 596, Earned Income Credit; and IRS Publication 972, Child Tax Credit.

Marital Status

Whether you are married or single has a significant impact on your taxes. In some cases, being married results in a “marriage bonus,” such as effectively averaging taxes when one spouse works and ...

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