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Dependents are one of the most powerful deductions taxpayers can claim. On your 2016 tax forms, every dependent lops $3,900 off of your taxable income, which could save you hundreds of dollars on your tax bill, depending on your bracket. However, determining who qualifies as a dependent can be difficult, often requiring the expertise of a skilled accountant.

For instance, you're probably aware you can claim your children and your spouse if they don't work outside the home, but what about other people you financially support? The IRS's definition of “dependent” is much broader than you might think. For tax purposes, a qualifying dependent is any member of your household or a relative who:

  • Earned less than $3,900
  • Received more than half of their support from you
  • Did not file a joint tax return with anyone else

accountantDoes this mean you can claim your live-in boyfriend and roommate as dependents? You may be able to, provided they meet the criteria. The details of each situation vary, so meet with an accountant if you have any doubts about whether you can claim exemptions for the people you support.

The rules are even more forgiving for relatives—another lenient category by IRS standards—including just about every family member by blood or marriage. Those in this category don't even have to live with you to qualify as a dependent, so if you support your brother while he's in school or regularly send money to your grandmother, you may be able to claim them as dependents as well.

 

For over 14 years, Hal Surratt CPA has provided individuals and businesses throughout the High Point, NC, area with reliable tax and financial advice. To find out how they can help lower your tax bill by determining all possible deductions, visit the website, or call (336) 861-4024 to make an appointment with an accountant today.

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