Who Exactly Can You Claim as a Dependent on Your Tax Return?
You might have a family member living with you. Or, maybe you are taking care of a foster child. Fortunately, your kind hospitality does not go unnoticed by the IRS when it comes to filing taxes as you can save thousands of dollars on your tax bill by claiming someone as a dependent. However, as you already know, the tax credits and deductions from the IRS come with a long list of eligibility criteria. You can only claim someone as your dependent if he/she meets a few guidelines.
Who exactly is a dependent according to the IRS?
A dependent, according to the IRS, can either be a child or an adult related to you in some way. Accordingly, you are eligible for tax credits or deductibles on your tax bill or adjusted gross income respectively.
You can consider a child as a dependent only if:
-You are related to the child in some way. The child must be your offspring, sibling (direct, half, or step), foster child, or adopted child.
-He/she must be less than 19 years of age, and in case the dependent is a full-time student, the age limit is 24 years.
-He/she must have stayed with you in your house for more than 6 months in the past tax year.
-You must have borne more than 50% of the child’s living expenses.
To claim an adult as your dependent:
-He/she must be relying on you for financial support. In other words, you must have taken care of 50% or more of the dependent’s living expenses.
-If working, the adult must have earned less than $4,300 in the past tax year – not enough to sustain oneself financially.
-The dependent must also have lived with you in the past tax year. However, the IRS has specific rules for dependent relatives who do not live with you.
-He/she must not claim any other person as his/her dependent on his/her tax return. The adult must not file his/her taxes jointly with the spouse as well.
Additionally, irrespective of the dependent being a child or an adult:
-He/she must be a citizen of the United States, a US national or resident, or a resident of Canada or Mexico. In the case of exchange students living with you temporarily, the same citizenship rules apply to be claimed as a dependent.
-And you should be the only one claiming the person as a dependent on the tax return. No other person can claim the same child/adult as his/her dependent along with you.
Why care about dependents while filing your taxes?
Depending on how you are related to the dependent, you can bring down your taxable income by thousands of dollars and claim as much in tax refunds that are non-taxable by the IRS.
-For the year 2021, you are eligible to receive as much as $3,600 as a tax credit from the IRS for a dependent child under the age of 6 years. That figure becomes $3,000 for a dependent child aged between 6 to 17 years.
-From 2018 onwards, the standard deduction for taxpayers with dependents has increased.
-The Additional Child Tax Credit has now become $1,400 for every qualifying dependent child.
-And, the Credit for Other Dependents now stands at $500 per dependent provided the latter meets the stated criteria.
In all, if you are supporting someone’s expenses, even when that someone is your own child, you are eligible to receive tax-free refunds from the IRS. So, re-evaluate your dependents, go through the tax credits and itemized deductions applicable, and claim the tax benefits you deserve for financially helping someone else.
Why not use the extra cash to buy a used car in Spartanburg?
If you can afford it, using the tax refund money that you received by claiming dependents to buy used cars in Spartanburg is probably the best use of the same. Sure, you can use the refund money for some other use like building your funds or actually paying your dependent’s expenses but a part of it can become your down payment for a new used car.
And that is possible in Family Auto buy here pay here dealership in Spartanburg. With just $500 as down, you can get easy bad credit financing to buy a quality used car and trade in your old vehicle to increase the down payment amount. You get a wide number of options due to our massive inventory. You also buy a used car with a comprehensive 2 years/36,000 miles warranty. A part of your tax refund money can fulfil your dream of owning a vehicle and 2022 is the best possible year to tick this box.
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