 We are in our example form 1040 populated with LASERT tax software. You don't need tax software to follow along, but it's a great tool to run scenarios with. You can also get access to the form 1040 related forms and schedules at the IRS website, irs.gov, irs.gov, starting point, single filer, Mr. Anderson, living in Beverly Hills, 90210 W2 income 100,000. We've got the standard deduction 12,950, getting us to the 87,050 taxable income. Page two, calculating the tax, 14774, withholding 15,000 to get us to the 226. We're mirroring that over here in our Excel worksheet. 100,000 W2 income, 12,950 standard deduction gets us to the taxable income 87,050, the tax pulling that from the software 14774, and then we have the payment 15,000 getting us to that 226. Now we're going to add a dependent. Now note that we're thinking about the child tax credit and the other dependent credit, and those are intimately tied to the dependence. So when we think about a dependent, then we're going to be thinking, what benefit do we get from a dependent? The benefit, big benefit usually will be one of the two credits, either the child tax credit, if they qualify for the child tax credit, and if we cannot get that, then we get the other dependent credit. Although there could be other benefits as well. For example, if we have a single filer as we have here, and then we have one dependent, it's quite likely that it will move our filing status from single filer to head of household. So from a practical standpoint, what this comes out to then is oftentimes when we're thinking dependence, we're thinking what's going to be the impact on the dependence on the tax return. Usually it's going to be the credits, but we also could have the filing status change. And in practice, you might run into situations where there's that gray area, meaning what if someone qualifies with a joint custody situation between two parents, for example, as it depended on two returns, you can't file both of returns and have the same dependent on two returns, or the IRS will of course have a problem with that. And you can think about those types of situations and plan for those types of situations in some type of agreements that are going to be set up, trying to maximize hopefully the tax benefits between everybody involved so that everybody can at least save money from the government and possibly then figure out what you're going to do with it, right? How are you going to divvy that up? It would be one way you might look at it. So in that situation, you might think, okay, what's going to be the impact on the filing statuses for the spouses involved? What will be the tax implications of that? And what will be the tax implications of of course the the credits involved, which could have a difference, for example, if someone hits the AGI limitation and starts to phase out the credit, whereas another, you know, because or another spouse might not hit the AGI limitation, and therefore might get a bigger benefit from the credit or something like that. All right, so let's add a dependent and start taking a look at it. Okay, so from the data input screen, we're just going to add our first name, last name, date of birth. And then of course, we need a social security number or some kind of identification number. We're going to start off with the standard child here and child live with the taxpayer when applicable for the earned income credit as well as the child tax credit. For the relationship, I'm going to put son not child. Okay, so then we're going to go to the forms here. So now of course, on the first page of the form 1040, we've got the child social security number. So all the personal information they want it right up front on the first page says the IRS. And this one qualifies for the child tax credit because they meet the age requirements and everything they're under 17. Remember that to be a dependent, then they have to be under 19 or 24. If they're a student, but to get the child tax credit, then they have to be under 17 is the general concept. And then if we don't get the child tax credit, then they would qualify for the other dependents, which would be the idea. In this case, however, probably pushed them up from single to head of household to because because a dependent is usually required for that, that will also change the standard deduction. So if we scroll down here, the standard deduction, if I changed the head of household went to the 19 for that wouldn't happen with every child. But that could be a significant change for for someone switching to the to the to the head of household standard status. So let's switch it over here in our worksheet. 19 for that gets us to the 80,060 600 80,000 600 roll in the dyslexia. Okay, number page two 11 855 11 855. Let's put that here 11 855. That's going to be that. And then we've got the credit of 2000. So if you look at the worksheet here, there's the credit calculation. We haven't hit the income threshold, which for a single filer as I believe 200,000. So we're good on that and we get the full 2000 of the credit. So if I put that into our worksheet over here, let's say we've got other credits. So I'm going to say other credits and let's put the child tax credit. I'm just going to put here dependent one 2000. I'm going to pull that into my worksheet. So that pulls into this line item. So that comes out to then if I pull back over 9855 and then 15 to get us to the 5145 5145. All right. So that's our starting point. Let's add another one. We're going to say Jill Anderson second child. So if I pull that on over to the form, then notice there's no change to the filing status now, because I don't I don't go from a head of household to something else at that point. So I'm going to go down here. Now I've got my two dependents that are reported. Both of them are our child tax credit qualified for. We don't have any change on the first page because the standard deduction did not change. If I go to page number two, the tax is now 11855. But I've got the 4000 doubling the child tax credit for the two kids that now qualify for the child tax credit. So if I was to mirror that over here, I got my other credits, let's say dependent dependent number two, number two, and then I'm going to say 2000 comes up to 4000 pulling that over to the page one in our formula. There it is 7855 15,000 gets us to the 7145 7145. Okay. Now let's imagine that that they're overnight they're over 19 they're over the 17 threshold for qualifying for a qualifying child and to be a dependent, they're over the threshold possibly there too, but we're saying they're a student age 19 to 23. So they still qualify as a dependent that being that 19 threshold up to 24 under 24. But they're not under the 17 number threshold to qualify for the child tax credit for. So there's still a qualifying child in terms of being a dependent, but they're not qualifying for the child tax credits.