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.
Bodyguards and Panic Rooms- Is Now the Right Time?
Executive Protection, i.e. Bodyguards and Panic Rooms Now may be the right time for bodyguards and panic rooms. Looking several years back, I met an interesting individual during a family office networking event. Based on the crowd in attendance, I expected him to be a successful entrepreneur, but as it turns out he was a…
Can DAFs Maximize Family Office Charitable Dollars?
Can DAFs Maximize Family Office Charitable Dollars? When you hear the name John D. Rockefeller, an image of the first, made in the USA, billionaire may come to mind. Brilliant and extraordinary, yes, but we’re going to discuss his son and only heir to the immense Rockefeller fortune. John D. Rockefeller Jr. who spent much…
Radical New Plane to Revolutionize Private Flight
Is there a radical new plane to revolutionize private flight? Can the aviation industry experience the same tech driven disruption so common in other markets? This past month, an odd-looking aircraft was spotted flying in Southern California. It was small with thin wings, bullet like in shape and had a rear facing propeller on the…
Not Your Mother’s Pants!
What happens when you mix a charitable auction with a famous pair of pants from an iconic movie worn by a legendary international superstar? A six-figure donation to cancer research and a lot of very happy people… On November 2, 2019, the Estate of Olivia Newton-John listed several items on Julien’s Auction. The famous actor…