Claiming a dependent can be very beneficial to taxpayers. To qualify as a dependent, the individual must meet five requirements:
Gross income: For tax year 2018, a dependent qualifies as long as their gross income is $4,150 or less. If the dependent is your child, there is no income limit until they reach age 19. If the child is a full-time student for at least five months out of the year, there is no income limit until age 24. Tax-exempt income, such as nontaxable social security benefits, is not included in the $4,150 threshold.
Member of household: The dependent must either reside in your home, or be closely related to you.
Citizenship requirement: The dependent must be a resident of the U.S., Canada, or Mexico, or be a US citizen or national.
Joint return: The dependent, if married, cannot file a joint return with his or her spouse, unless the joint return is filed just to receive a refund for withheld taxes.
Support test: To qualify, you must pay more than 50% of the dependent's expenses for the year, or qualify to claim the dependent under a multiple support agreement.
Getting a head start on tax planning will enable you to maximize your tax deductions and create an efficient financial plan.
If your status is changing due to marriage, divorce, or the arrival of a new child, call 805-496-2828 for a review of your situation.
