When it comes to filing taxes, you always want to get the most out of your tax return, and the more deductions you can take, the more your tax liability will be reduced. Claiming dependents is a simple way to save on your taxes, but how do you know if the person you’re supporting qualifies as a dependent? The team at Simplified Tax in Sparta, WI, wants to help eliminate some of the confusion. They explain what makes an individual qualify as a dependent.

What Is a Dependent?

Simply put, a dependent is any person who relies on you for financial support throughout the year. However, there’s more to it than simple financial support. For most families, dependents are children and qualifying relatives who live at your home for most of the year. While they live at home with you, you should be providing for most of their needs; this includes living expenses, food, tuition, clothing, and other items.

Categories of Dependents 

For most families, their dependents will fall into one of two categories: children and qualifying relatives. Each must meet certain criteria to qualify for deductions on your taxes.

Qualifying Children

You can claim your child as a dependent if they are an immediate member of your family. These children do not have to be related to you as long as you’re supporting them on a daily basis. They must live with you for most of the year and rely on you for support.

Additionally, your child must either be under the age of 24 and currently enrolled as a full-time student or under 19 years of age if they’re out of school. Should your child have a job, they cannot rely on it to cover more than half of their living expenses. If their income is higher than your contributions, you will not be able to claim them as a dependent.

Qualifying Relatives

If you’re taking care of your aging parent or another family member, you may be able to claim them as a dependent. Your relative must live with you or in a qualifying home or nursing facility. They should not make more than $4050 in a calendar year and must rely on you for financial support. Just as with your children, you must provide more than half of their yearly financial support.

If your relatives meet these requirements, you can likely claim them as your dependents on your taxes. While no two situations will be the same, an experienced accountant will be able to assess your individual situation and provide guidance when you prepare your tax return.

If you’re looking to get the most out of your tax return, let the team at Simplified Tax help you prepare and file your taxes this year. Not only will they work with you to make sure you get the right deductions, but they’ll make sure your information is filed accurately and on-time. Learn more about their services online and call (608) 269-2633 to schedule an appointment.