Many people in Salt Lake City struggle to figure out whether they can claim a certain person as a dependent. Fortunately, a Utah CPA can help you decide whether someone qualifies as a dependent.
Why Should You Claim a Dependent?
The Internal Revenue Services classifies certain people as dependents. You want to claim dependents during tax preparation because it can help you save thousands of dollars. In 2018, people could reduce their taxable amount by up to $4,050 for every dependent. You can also qualify for other benefits if you have a dependent.
This includes things such as dependent credits, tax credits and earned income tax credits. You may also be able to write off certain expenses such as medical expenses and daycare expenses. The expenses that you write off can be the things that determines whether you owe money or receive money.
The rules are not that complicated. However, many people in Salt Lake City do not know if the rules apply to their situation. For example, they may have a child in college. They may also have a family member who stays with them during the summer. The following checklist will help you during tax preparation.
People Who Qualify as Dependents
A qualifying relative and qualifying child are the people who will be classified as dependents. You will need to answer the following questions in order to determine whether a person is a qualifying child or qualifying relative.
Are they a United States citizen or resident?
The person has to be a United States citizen, resident or national. Some people wonder if they will be able to claim a foreign exchange student that lives with them for a few months. You may be able to claim them if they meet this requirement.
Are you the Sole Person Who Claims the Dependent?
You cannot claim someone as a dependent if another person claims them as a dependent. You also will not be able to claim them if they take a personal exemption.
Is the Person Filing a Joint Return?
You will not be able to claim someone who is married and file a joint return.
Qualifying Child
Is the child related to you?
This could be your child, stepchild, foster child, sibling, half-sibling or the off-spring of any of these people.
Does the child live with you?
Your dependent must live with you.
Is the age requirement met?
The dependent must be under the age of 19. If they are in college full-time, then they must be under the age of 24.
Do you support them financially?
A dependent can have a job, but they must not be able to support themselves financially.
Qualifying Relative
Does the person live with you?
Did they earn less than $4,015 per year in 2018?
Do you support them financially?
You must provide at least half of their financial support.
A Utah CPA can help you determine who qualifies as a dependent and help you get the maximum refund possible.