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The idea of who can be called a dependent can become complicated when it comes to filing taxes. If you’re married with dependents, you may be able to reap significant financial benefits through using dependents on your tax return in the form of tax deductions and credits that will decrease your overall tax liability. The Internal Revenue Service (IRS) does, however, have specific guidelines on who may be considered a dependent. If you follow these rules to the utmost, you will be able to get the greatest tax deduction without paying any penalty. In this guide, we will answer basic questions regarding dependent eligibility, what tax benefits for claiming dependents, and how to determine who qualifies based on the IRS guidelines.
What Are the IRS Requirements for Claiming a Dependent?
Under two categories, qualifying child and qualifying relative, the person must satisfy specific IRS standards to claim you as a dependent. Your child, stepchild, foster child, sibling, half-sibling, or descendant of either of these relatives is a qualifying child. You must do this if they are under 19 years old and have been living with you for more than half the year. Also, they should not provide more than half of their financial support. You can still claim a qualifying relative as a dependent if they don’t qualify as a qualifying child.
What Are the Tax Benefits for Claiming Dependents?
Providing for a child’s well-being is one of a parent’s most important and permanent duties; this obligation persists even after parents separate. Following a divorce, child support helps give kids the money they require. Parents might not know how child support affects their taxes, though. It’s critical to comprehend any fiscal ramifications of child support to make wise choices both during and after a divorce.
- Child support payments are exempt from taxes under both federal and state law in Nebraska. You do not have to include child support payments on your tax return if you are the parent receiving them.
- Alimony payments are deductible for the spouse who makes them and taxable income for the spouse who receives them. The payer can lower their taxable income, but the recipient is burdened with taxes.
Find Out Who Is Eligible to Be the Child’s Dependent
When parents divorce, there may be financial repercussions because of who is allowed to claim the child as a dependent on their taxes. The IRS has regulations that apply uniformly in all states when evaluating dependent status for divorced or separated parents. The person who spends the most nights with the child throughout the year, known as the custodial parent, usually has the right to claim the child as a dependent. However, this position may be bargained or transferred to the non-custodial parent in certain situations.
Can Non-Familial Members be Dependents?
Family members are most dependents, either right away or miles away. However, according to strict IRS guidelines, some non-relatives can earn the status of a dependent. And to claim somebody who isn’t a family member, they must have lived with you all year. These cannot be claimed as dependents by another taxpayer. I learned that you have provided more than half of their financial support. For example, if you provide financial assistance to a friend who lives in your home and meets income and support criteria, then he may be counted as your dependent if the IRS rules.
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Conclusion
What qualifies as a dependent will help you take advantage of some of those “tax benefits for claiming dependents. If you can’t decide on your own if you’re eligible to receive documents, you can consult professional assistants who will provide you with their guidance. Choice DNA is a reliable and accurate DNA testing service, and it’s also useful in legal matters to determine who a dependent is or whether someone is part of a family claim. From helping with paternity disputes to inheritance issues that impact the way you file your taxes, you can trust Choice DNA to sort out your relationships for you in a confident manner.
