<prompt> Human: My wife and I find ourselves in the 35 tax bracket and I was looking into any tax advantages I should be perusing expecting our first child, a daughter, in a couple weeks. From What Im learning theres the dependency exemption of 4000 unfortunately well miss this for 2017 by a few weeks. Were also looking into 529 plans for college saving. Other than that Im not really seeing much besides child care deductions when we need to go that route. Ive envisioned a scheme where we transfer some of our brokerage investment money to our child which then claims the capital gains as her own up to 38,600 a year to save 15 capital gains tax, netting 5,790 a year, but this seems like a lot of effort and morally ambiguous having a toddler filing our capital gains. Any other ideas would be appreciated.Edit: Thanks didnt know about the kiddie tax, but since I found it morally ambiguous, makes sense theres be a law putting a ca bosh on it. Thanks for the FSAcafeteria tip.  <response>: Exemption for the kid disappears in 2018.Something nicknamed the Kiddie Tax causes most of your childs investment income to be taxed at your bracket. That ruse has been shut down to prevent exactly what you suggest.See Form 8615. 