Utah Ranks Number One in U.S. Tax Exemptions

In what state will you find the largest families? Utah? That’s right, 19 Utah counties make the list of the top 50 nationwide in the average number of exemptions claimed per federal tax return, according to a new Syracuse University report.

The Salt Lake Tribune reported that the Syracuse study, which is based on 2002 returns, showed Utah having more counties in the top 50 than any other state. Texas came in a distant second with 11 counties.

Not all of the exemptions that reduce the amount of tax owed are claimed by people with children, but most of them do represent larger-than-average families, which is backed up by the 2000 Census. The data showed that Utah has the largest families of any state with 3.57 people per family, compared to the national average of 3.14 people, the Tribune reported.

"Large numbers of exemptions pretty much means large families," Salt Lake City certified public accountant Gail Anger told the Tribune.

For the 2003 filing year, each exemption reduced taxable income by $3,100, the Tribune reported, meaning that for a taxpayer in the 10 percent tax bracket, that could trim the amount of federal income tax due by $310 per child. For a taxpayer in the 35 percent tax bracket, it could mean savings of $1,085 per child.

Even though the overall cost of having children far outweighs the benefits at tax time, people still take the exemptions.

CPA Anger, whose four children now are adults, told the Tribune that the income-tax breaks were never intended, of course, to fully fund the cost of raising a child. "But are they nice to have, and they do help," he said.

You may like these other stories...

School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...
Many senior US tax professionals believe that a streamlined audit process will be the top benefit resulting from the IRS Transfer Pricing Audit Roadmap, a new toolkit organized around a notional 24-month audit timeline,...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.