Q: My husband and I are a bit lost this tax year. We had a baby on Aug. 31, 2007. We have so many people telling us she is worth $3,400 on our taxes. All we have found so far is that either she’s not old enough to be claimed or she is only worth the $1,000 child deduction. Any help in this would be great; we are trying to do this on our own this year. We just don’t have the extra money to pay for tax help. Thank you in advance.
A: Congratulations on your new child. You will find that she is quite a tax benefit to you.
Her age doesn't matter in 2007. Claim her as a $3,400 exemption, which will reduce your taxable income. She is eligible to be claimed for the child tax credit, a $1,000 reduction in your taxes. And if your income is from earnings and is modest, her appearance on the scene will permit you to claim a larger Earned Income Credit. And she will get you an extra $300 under the new economic stimulus law that the president signed.
AARP has sites all around the United States where folks can go and get their tax returns done at no cost. Find the AARP Tax-Aide site nearest you.
These questions are actual inquiries submitted by taxpayers to our AARP Tax-Aide Program. The AARP Tax-Aide Program is a volunteer-run, free tax-preparation and assistance program offered to low- and middle-income taxpayers with special attention to those age 60 and older. Our volunteers are trained and IRS-certified to understand individual federal-tax issues. Our volunteers provide tax assistance as a public service and cannot guarantee the accuracy of the information provided.