What is the set amount for tax deductible if you have a child?

Question

well basically last year and this year on my taxes i am giving back to Uncle Sam rather than getting,. I thought if you have a child that you will get money back. before my daughter was born i was actually getting back every year, now the last 2 years i have been giving back. What's up with that?

Answer 1

Whether you pay or get a refund depends on only one thing - whether you paid in through the year more than your tax liability (you'll get the rest refunded) or you didn't pay in enough (you'll owe).

You don't get money back because you have or don't have a child, although having a dependent child will reduce your taxes if you have any tax liability.

If you changed your W-4 two years ago, then that could be the problem - you're not having enough deducted. Look at your total tax two years ago, and your total tax now. Your total tax with the child should be less, unless you make a lot more money now.

For each dependent child, you get an exemption of $3300 - that amount is subtracted from your income before figuring your tax. Then if they meet certain requirements, you also get a $1000 credit for them - this amount is subtracted from your tax liability if it's that high, or reduces it to zero otherwise.

Answer 2

Personal and dependency exemptions reduce your taxable income by $3,300 each for tax year 2006.

Whether you get a refund or have to pay depends upon your tax liability and your withholdings. If you are having to pay, you are not having enough tax withhheld, pure and simple. Change your W-4 to have more tax withheld from your pay.