One of the most basic write-offs in tax law is the dependency exemption ($3,900 per dependent for 2013; $3,950 per dependent for 2014) (Code Sec. 151(d)(1)). This deduction is supposed to offset some of the cost of supporting a child or other person. There is no cap on the number of dependency exemptions that can be claimed. However, a variety of specialized rules may limit the dependency exemption or impact who can claim the deduction for a certain dependent.
Ancillary Benefits
A taxpayer who claims a dependency exemption for a child may also be eligible for other tax breaks, such as head of household filing status, the earned income tax credit, the child tax credit, and the dependent care credit.
