The cost of raising a child is far more than the credit you will get on your taxes for having one. That is one thing that Americans tend to forget. Some families are increasing their family sizes simply for the benefits available to large families with insufficient income to support the needs of that family. The problem with this is that having a large family really only helps at one time of the year: tax time.
Increasing Family Sizes
Families can take advantage of a variety of deductions which are uniquely available to them. However, families cannot utilize such deductions forever. Once those children start earning their own income, they’re really not dependents anymore and you lose those credits entirely when your children reach adulthood.
Children who are born in one country while their parents have foreign citizenship are often deemed dual-citizens. Those with residences and equal time spent in two different countries are also considered dual-citizens. What this means is that children ― yes children ― who do not have income can be taxed if they have a bank account or any type of asset in their name. They are taxed by both governments. Money still has to be paid on assets or provable income no matter what country it comes from.
Some people believe that having more children will put their family into a different income bracket to give them more tax breaks and make more federal and state funded programs available to them. Rather than thinking of children as means to acquire tax credits, be certain you can financially support your family without having to rely on a big tax refund check in the mail one time a year.
Image credit: Nicolas Raymond