Reducing You Taxes by Claiming a Dependent

       
    The IRS has been looking closer at Dependent deductions since 2005. Being able to claim a dependent on your taxes is tied to a number of tax related benefits. It may benefit the taxpayer because they can claim each dependent as an exemption. They may also be able to qualify for a child tax credit, depending if they meet the guidelines.
     
       To help figure out if you have a qualifying dependent there are a set of rules you should go by. the following will be considered as a qualified dependent:

1. The person must be your child, stepchild, adopted child, foster child, brother, sister or a descendant of one of these.
2. The person must reside in the same residence with the taxpayer for more than half the year.
3. Age is also a factor. the qualifying dependent has to be:

  • Under the age of 19 at the end of the year
  • Under the age of 24 and be a full time student or at least 5 months out of the year. 
  • Any age and totally and permanently disabled 
4. The qualifying person did not provide more than half of his/her support during the year. This is different from the old rules which stated the taxpayer had to provide half the support for the child.

A qualifying relative can sometimes also be claimed as  dependent as long as he/she meets the requirements such as:

  • The dependent can't be a qualifying child or another taxpayer.
  • The qualifying dependent earns less than the personal exemption amount during the year which for 2011 was $3,700.
  • You must provide more than half the dependents support during the year.
  • The qualifying dependent has to be related to you in one way or another.
  • If the dependent is married, the dependent cannot file a joint return with his or her spouse.
  • The dependent must be a citizen or Resident Alien of the U.S., Canada or Mexico.
Make sure your dependents are qualified before you file your return, it will help reduce your chances of receiving a letter from the IRS.

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