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.
Venture Capital Alternative for Technology Entrepreneurs
If you are an entrepreneur with a small technology based company looking to take it to the next level, this article suggests an alternative that may be of particular interest to you. Your natural inclination may be to seek venture capital or private equity to fund your growth. According to Jim Casparie, founder and CEO…
Startup Fundraising – Do You Know Who You Are Talking To?
Startup Fundraising – Do You Know Who You Are Talking To? Venture capital, private equity, mezzanine debt, venture debt, angel money, investment bank? What’s the difference and who are the players? Many people start looking for funding and become involved with investment bankers or business brokers without really understanding what they are looking for or…
Republican Lawmaker Pushing Real Tax Reform
Republican Lawmaker Pushing Real Tax Reform By Kent Livingston Will our country ever see true tax reform? While politicians continue to battle over who should pay what and who is getting away with highway robbery, none of them seem to be able to come up with a better plan to actually fix our country’s broken…
Six Facts About the American Opportunity Tax Credit
Six Facts About the American Opportunity Tax Credit Many parents and college students will be able to offset the cost of college over the next two years under the new American Opportunity Tax Credit. This tax credit is part of the American Recovery and Reinvestment Act of 2009. Here are six important facts the IRS…