Ever been in a situation where you’ve had somebody staying with you for an extended period of time? Maybe it was the relative that was going to stay with you for a “brief period of time” until they “got back on their feet”. Heard that one before? Or maybe you’ve had to have a parent move in with you where you’ve had to take care of them. If you find yourself in a similar situation, you might be wondering what tax deductions are in store for you. To be able to claim a dependent on your return, there are 5 tests that you have to pass in the eyes of the IRS. Here they are:
1. Support Test.
The tax payer must provide more than half the support of the claimed dependent, except for special rules with respect to multiple-support agreement and children of divorced or separated parents. Support includes: food, lodging, clothing, education, medical and dental care, recreation, transportation and other necessities.
2. Gross Income Test.
The person claimed as a dependent must have gross income of less than the annual personal dependency exception amount. For example, this amount is $3,500 in 2008 ($3,650 in 2009). However, the ceiling does not apply if the dependent is a child of the tax payer is under age 19 at the end of the calendar year or a full-time student at under age 24 at the end of the calendar year. […]
