Who is a dependent on a tax return?

Every day we have customers asking us how we can increase tax refund or decrease tax liability legally. There are a lot of ways how to do it. But today we will focus on dependents: who they are.

First, according to the IRS, a dependent is “a person other than the taxpayer or the spouse who entitles the taxpayer to claim a dependency exemption.” A dependent can be a qualifying child or a qualifying relative.

Always remember, if you are claimed as a dependent on someone else’s tax return, you cannot claim anyone as a dependent, regardless of having the qualifying child or relative.

To better understand your situation, let us look at the requirements of the qualifying child to be claimed as a dependent. The child must be:

  • Unmarried,
  • Married but does not file a joint return, or
  • Married and files the joint return, but only to claim a refund of withheld tax,
  • U.S. citizen or resident
  • Your son, daughter, stepchild, adopted or a foster child, grandchild, or
  • Your brother, sister, half-brother, half-sister, stepbrother, stepsister, or niece or nephew,
  • Under the age of 19 and younger than you,
  • Full-time student and younger than you,
  • Disabled, regardless of age,
  • Must live with you for more than half of the year,
  • You must fully support his or her.

As we have previously mentioned, the dependent can be the child or the relative. So, now we need to look at the requirements for the relative to be claimed as the dependent:

  • Must live with you all year as a member of your household, or
  • Your child, parent, brother/sister, stepparent, stepchild, stepbrother/stepsister, half-brother/half-sister, grandparent, grandchild, son-in-law/daughter-in-law, mother-in-law/father-in-law, brother-in-law/sister-in-law.
  • If related by blood
    • Uncle/aunt
    • Niece/nephew.
  • Cousins can NOT be claimed as dependents.

There are situations in which the child or the relative can be claimed as dependents. For example, if they were temporarily absent. In other words, if the child or the relative was attending school, taking vacations, or staying in the hospital, they can be claimed as dependents.

In conclusion, it is easy to claim someone on your tax return as the dependent, but you must be sure that this person meets all the requirements.

Benefits of Filing Tax Return on Time

Filing taxes is a very stressful experience for everyone. Some people may forget about it, some may not have money to pay their taxes. But it is very important to file your taxes, and more important to file it on time. There are 3 benefits of filing your taxes on time.

  1. You avoid interest and penalties. There are 2 types of penalties: filing late and paying late. If you file your tax return more 60 days late, the minimum penalty is around $210, but it may be higher if you owe more than $210 on your tax return. If you pay late, the interest accrues on top of penalties.
  2. You avoid losing future refunds. If you owe taxes to the IRS, the part or all of any refund will be used to pay it.
  3. Safeguard credit. If at any time, the IRS files a tax lien against you, it may affect your credit score, and it may become difficult to get a loan.

There are still options to avoid penalties and interest.

Feel free to contact us at 848-241-3776 to get more information.