Saturday, January 2, 2010

Last baby of the old year or first baby of the New Year?

ST. LOUIS, MO (KTVI) - If you had the choice, would you like the attention that comes with delivering the first baby of the new year or the tax break that accompanies a last minute 2009 newborn? Kathryn and David Dobbs of St. Louis claimed the "first" baby title when their son arrived Friday, New Year's Day at 12:05 am at SSM St. Mary's Health Center in Richmond Heights. The yet to be named seven pounder joins two and a half year old twin siblings... Abby and Ryan. The hospital's Family Birthplace team presented the couple with a child's wagon full of gifts to mark the special occasion.

"So far it's already been a little easier just having one," remarked mother Kathryn Dodds adding, "but I think our hands will be full with three for a while."

What David and Kathryn won't be getting is an immediate tax break. The parents can claim $3650 in a tax exemption for their son, but not until they file their 2010 tax return sometime in 2011.

That's not the case for an Imperial family whose third child also arrived this week. Ava Gomayo made her appearance at 7:17 pm New Year's Eve at St. John's Mercy Medical Center in Creve Coeur. "She's beautiful and we're happy she's healthy," said her mother Tracy Gamayo who admitted missing out on the "first" baby title was not a problem. "I'd rather have the last baby, I think," she said from her hospital bed adding, "the tax break will be nice."

Representatives from the tax services firm H & R Block presented Tracy and her husband, Jeff Gamayo with a bag of baby items including a bib identifying the infant as a " tax deduction." The firm hoped to use the gift as a way to teach new moms and dads "that you still get that tax credit at the end of the year." H & R Block spokesperson Rae Ann Summers urged parents to check out other potential tax breaks including the child tax credit and the earned income tax credit that might apply depending on a family's income.

As luck would have it, the Gamayo's can make use of the instant tax deduction their daughter provides while the Dodds would not have benefitted if their son had come early. David Dodd, who completed his undergraduate degree in accounting, is now a third year medical student at St. Louis University. "I realized we're missing this deduction, but being a student and not having any income it didn't really matter," he said as he and his wife laughed.

Depending on a number of factors (including the amount and source of the parents' income, whether the baby's parents are themselves dependents of their own parents, and the number of children already in the family), a baby born before midnight Thursday could have added over $4,000 to a 2009 tax refund check (and additional amounts on state refund checks as well.) Or possibly (as in the case of the medical student profiled above) brought no tax benefits at all, if the family did not have any income.

Congratulations and best wishes for health and happiness to all the parents of the new babies, whenever they were born, and best wishes for a better world, including a smarter government and a simpler tax code!

1 comment:

  1. Just a minor correction: The last name is Dodds not Dobbs or Dodd.