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Rules on dependents can help you save thousands of dollars on your taxes. Yet many of us are not aware of who in our family may qualify as our dependent. Review the rules for claiming dependents here for a qualifying child or relative.
Having trouble deciding if your Uncle Jack, Grandma Betty or daughter Joan qualifies as a dependent? Help is on the way. Here's a cheat sheet to quickly assess which of your family members you can claim on your tax return.
If you have a family, you need to know how the IRS defines “dependents” for income tax purposes. Why? Because it could save you thousands of dollars on your taxes. For every qualified dependent you claim, you reduce your 2016 taxable income by $4,050. This can add up to substantial savings on your tax bill.
Dependent rules also apply to other benefits, such as tax credits. Many of these credits are available only if you have qualified dependents. For example, both the child tax credit and the earned-income tax credit rely on these rules.
In addition, the rules help you determine if you can write off dependent daycare expenses, medical expenses, various itemized deductions and most tax credits that involve children or family issues. Qualifying for these benefits can spell the difference between owing money and receiving a refund.
The basic rules aren’t complicated. But it can be difficult to apply those rules to certain family situations. That’s especially true if you have a son off at college, a cousin who stays with you during the summer, or a daughter with a part-time job. The checklist below will help you decide which relatives you can claim as dependents.
Who Qualifies as a Dependent?
The IRS rules for qualifying dependents cover just about every conceivable situation, from housekeepers to emancipated offspring.
Fortunately, most of us live simpler lives. The basic rules will cover almost everyone. Here’s how it all breaks down.
There are two types of dependents, each subject to different rules:
A qualifying chil...
$ 35.00
[Solved] How many dependents can one person file on their tax return. Do divorced couples split dependents
Solution preview. Please find the attachment for full answer...
Your dependent may be required to file a return if they have one or more of the following types of income:
• Earned income: This includes w...
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