Who Really Qualifies as a Dependent for Taxes?
How many dependents do you really have? Who can really be counted as a dependent? These are some of the most common questions that all taxpayers have. Can you count all of your children, live-in help, or perhaps a dog or other family pet? What about a friend who decides to crash at your place and basically mooch off you the entire year; can he or she be counted as a dependent?
As far as the IRS is concerned, there are two different kinds of dependents but there are dozens of scenarios that can fall under these two categories. There are also different rules for each type. The first type of dependent is classified as a qualifying child. The second type is a qualifying relative.
A qualifying child must be related to you, either by birth or adoption, or be a step or foster child. You must also provide more than half of the child’s total financial support and you can be the only person claiming that child on your return. To be a dependent the child must also be 18-years-old or younger, or if he or she is a full-time student, younger than 24-years-old.
The rules for being counted as a qualifying relative are much different. First, if your relative is a blood relative then he or she does not have to live with you in order to be counted. However, he or she must not provide more than half of his or her own support and that person cannot make more than $4000.
For a person who is not a blood relative to qualify as a dependent – like a lifelong friend who is down on his/her luck, or just plain lazy, or even your significant other – that person must live with you the entire year and their income must be less than $4,000 for the entire year. No one else can claim the person and you have to provide more than half of his or her financial support.
Which Leadership Traits Do People Want to Follow?
Which Leadership Traits Do People Want to Follow? By Alan Olsen Which Leadership Traits Do People Want to Follow? There are many aspects to being a great leader. And great leaders have many different qualities that make people want to follow them. Being humble, kind, honest, and emotionally intelligent are just a few of the…
How to Network
How to Network I often speak to groups about employees becoming entrepreneurs. Part of this transformation is increasing revenue by bringing in new clients. One question about finding new clients always comes up; “How do I network?” These employees sincerely want to network, they just don’t know how. In an attempt to give a worthwhile…
Basics of Forming a Corporation
Basics of Forming a Corporation If you have decided that the limited liability and the tax structure of a corporation are right for your business, the next step is actually forming the corporation. The law of the state in which you incorporate will dictate exactly what you need to do, but the steps are basically…
5 Rules of Building Successful Connections
5 Rules of Building Successful Connections Author: Will Corrente Updated: 6/10/2013 For me, connecting with people and connecting with entrepreneurs is one of the most enjoyable aspects of business and entrepreneurship. As a “Connection Optimizer”, I love brainstorming, making introductions, and pointing out potential synergies between friends, colleagues and fellow entrepreneurs. Like all social…