How To Claim Dependents On Your Tax Return
By: Christian Ortega, Content Writer
You devoted yourself to providing the best for your dependents; time to get a break from your taxes for your efforts.
You can save thousands of dollars on your taxes by claiming your dependents on your taxes. Don’t be mistaken; credit does not just apply to children; it extends to others living in your home who qualify as dependents.
It’s essential to understand the nuances behind dependents and taxes. To help you, we detailed how you can claim dependents on your tax return.
Why you should claim qualifying dependents on your taxes
Claiming someone dependent on your taxes will save you money. After all, you have an opportunity to claim the Child Tax Credit, Additional Child Tax Credit, or the Child and Dependent Care Credit in your return.
For dependents other than children, you’ll want to claim the Credit for Other Dependents. Dependents also have a bearing on your earned income tax credit and some of the itemized deductions you can claim, like medical expenses. All those credits and deductions could be the difference between receiving a hefty refund or owing money to the IRS.
Who qualifies as a dependent?
According to IRS, qualifying dependents fit into two categories: qualifying child and qualifying relative. A qualifying child must meet five prerequisites:
A qualifying relative must pass four tests:
7 Rules for Claiming Dependents on Your Tax Return
While the lists served as guidelines for who qualifies as a dependent, we still haven’t had a chance to get into details behind claiming dependents on your tax return.
A qualifying child must live with you for at least half the year except in various circumstances, such as if the kid was born in November or spent time at college. A qualifying relative dependent must live with you unless they are a member of your immediate family.
Age only matters for non-disabled dependent children. Kids below 19 can qualify whether they’re a student or not, and they can keep qualifying until 24 if they’re a student. A disabled child can qualify regardless of age. Age also doesn’t matter for dependent relatives who are not your children.
You must provide the majority of the person’s support. Whether the dependent is a child or another relative, you have to be responsible for at least 50% of their support in the tax year, including housing and food, medical and dental care, clothing, recreation, and other necessities. Sure, Jerry Seinfeld would’ve loved to have Kramer listed as a dependent, but remember that unless they’re related to you or lived with you, they’re not dependents in the IRS’ eyes regardless of how much they mooch off you.
They may have some income. The income of a dependent relative for the tax year must be below $4,300. Dependent children can make income that constitutes up to half of their support but may need to file their tax return and pay taxes on it.
They are your dependent and yours only. You can only claim someone as a dependent if no one else is claiming them on their taxes as well. This rule can be tricky in cases of divorce or separation, and can take some negotiating when spouses file separately, since only one of you can claim your child.
Examples of Qualifying Relatives
The rules about who is and isn’t a “qualifying relative” can get confusing. After all, they don’t technically have to be your relative. Here are few examples to bring some clarity to the issue:
Filing taxes is an intricate process. It becomes frustrating when it appears to be a rabbit hole of forms, deductions, and numbers. However, it doesn’t need to be. While this blog explains how to claim a dependent on your taxes, a Pro’s help can make the difference.
This tax season, take the stress out of taxes by not doing them. At Taxfyle, we have thousands of Pros across the country who are all qualified to file your taxes for you. We went through the trouble of finding the best accountants in the country to give tax filers like you the relief of knowing that your taxes are filed quickly and correctly this tax season.
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