Hoffman - Hoffman, Smith, and Willis, CPAs 5191 Natorp...

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Hoffman, Smith, and Willis , CPAs 5191 Natorp B oulevard Mason, OH 45040 March 5, 2010 Mr. Donald Dewey 4321 Mt. Vernon Road Dover, DE 19901 Dear Don: At the recent Chamber of Commerce meeting, you asked me about the tax advantages of having Van, your son, claim Debra, your daughter, as a qualifying child. If Van can treat Debra as his qualifying child, he qualifies for a dependency exemption, the child tax credit, and the earned income tax credit. On the other hand if you claim Debra, the only benefit available is a dependency exemption—your income is too high to permit the use of either the child tax credit or earned income tax credit. A dependency exemption yields a greater tax benefit to you than to Van, but the tax saving is by far outweighed by the unavailability of the two credits. Consequently, the family would save taxes if Van claims Debra as his qualifying child. In such a case, you would have to forgo the dependency exemption for Debra.
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Hoffman - Hoffman, Smith, and Willis, CPAs 5191 Natorp...

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