December 20, 2006

Hey Baby, What Say You And Me Make A Tax Deduction Together?

I was having a hard time parsing this NYT article about the correlation between the number of kids born in the last week of the year--between Christmas and New Year's--an increase in the value of dependent-related tax deductions.

In the last decade, September has lost its unchallenged status as the time for what we will call National Birth Day, the day with more births than any other. Instead, the big day fell between Christmas and New Year’s Day in four of the last seven years — 1997 through 2003 — for which the government has released birth statistics. (The day was in September during the other years; conception still matters. [whew. -ed.]) Based on this year’s calendar, there is a good chance that National Birth Day will take place a week from tomorrow, on Thursday, Dec. 28.
But the economists' research mentioned in the article was from 1999, before the big year-end baby rush.

And the analysis that higher income families "who, presumably, are more likely to be paying for tax advice" have more December babies ignores--among other things--the fact that the $500 child tax credit is worth less to them as a percentage of total income, and that they get no earned income tax credit at all.

I've never heard of anyone planning a December baby to have a tax deduction, but I've heard of plenty of people who'd rather be in sweaters than bikinis in their third trimesters. There's a whole host of birth date drivers that seem more relevant than the tax code; what's their correlation?

Conception still matters, after all, and it sounds like some economists could use a refresher course in how babies are made. Is there a statistically signficiant correlation between taking that last week off and, say, mid-September births? How about studying the correlation between parents' birthdays and the conception dates of third and fourth kids?

The article becomes clear at the end, where we find out the writer--and new dad, congrats--David Leonhardt, was born on January 1. Kudos for managing to slip a personal rumination on the deep meaning of your existence into the Business section, even if he never mentions whether his parents' anniversary is April 10th.

To Do List: Wrap Presents. Have Baby [nyt]
Sidebar: More On The Effect of Timed Births [nyt]

8 Comments

Don't you lose the tax credit if you pay the AMT anyhow?

I would bet a lot of those babies are due in early January and are induced to come out in December.

I blame all that drinking on St. Patty's day for all the December babies.

[that's the gist of the article, that Jan babies are all induced or scheduled c-sections. I can definitely see people scheduling to avoid weekends or holidays (which the economists are also studying, apparently), but still. -ed.]

They failed to note that all these babies were probably conceived in a tax-filing procrastination orgy... babies conceived around April 14 would be due around Dec 30.

More seriously, most women I know are forced to do pretty complicated calculations to max out their maternity leave, if you have the baby during a holiday that adds a precious week to your leave. I bet in sweet pro-baby lands like Sweden and France where they have sweet pro-baby leave policies babies come out whenever they like.
-Dara

My sister-in-law, who is due any day now, is hoping for a December baby because her family has already met this year's health insurance deductible.

38.5 weeker here with scheduled induction for 12/29. Aside from my hormonal piss poor attitude screaming "get this baby out of me yesterday," we have more concern for avoiding holidays than much else. Who wants to give birth when the entire medical staff wishes they were somewhere else? I have an appt tomorrow, and if there's any progress, we'll want to induce then to avoid having a Christmas Eve/Christmas Day/Day After Christmas birth experience. Same goes for New Years Eve/New Years.

The tax break won't help us much, and without a call to the acct., my foggy preggo brain couldn't tell you why. Yet almost everyone I talk to about my pregnancy brings up the benefit of the December tax break. Friends. Relatives. Strangers at drive-thru windows. Enough to where the rationale behind the article makes sense to me... even if the tax break does diddly squat for some of us.

When I saw the headlines I thought, "elective c-sections." People are choosing to do it earlier than later for various reasons, including the tax break kicking in one year earlier. Doctors go on vacation, bad weather may be looming... it's not all about the money.

Some of us are just good planners and very lucky things work out as they do. I intentionally tried to get pregnant in March for this exact reason. That and because I have such a high insurance deductible and wanted all the costs in one year. I even reset my cycles with birth control about 6 months before so I wouldn't risk going into January. Marielle was born December 15. So yes, it does happen. There are neurotic freaks such as me!

Whoah...way too much planning and thinking for me.

My Grandpa was born (so the records show) on January 1, 1900. Don't know whether or not that was his actually due date, as he was born on a farm and I'm pretty sure there was no doctor around to sign the birth certificate.

On the other hand, Cobalt was conceived, completely unplanned, on v-day. I'm sure if we had to plan it we still wouldn't have a kid. And if we even thought about the fiscal implecations? Phew!

"They failed to note that all these babies were probably conceived in a tax-filing procrastination orgy... babies conceived around April 14 would be due around Dec 30."

ROFLMAO! But they still have one day left to file :)

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