Six Rules That Affect Everyone Who Files a Tax Return
Author: Jenny Shilling
Every year we file tax returns, yet each tax return is unique just as every person is unique. And every year the tax laws change making each return more and more complex. Oddly enough there are some rules that do not change. These are the rules regarding dependents and exemptions. More precisely, there are the rules defining dependents and exemptions.
Exemptions reduce your taxable income. There are two types: personal and exemptions for your dependents.
- Personal Exemptions: You usually may claim one exemption for yourself on your return. You may also claim one for your spouse if you are filing a joint return. If you are filing separately, you may only claim one for your spouse if he or she had no gross income, is not filing a joint return, and was not the dependent of another taxpayer.
- Exemptions for your dependents: You can claim an exemption for your dependents. A dependent is either your qualifying child or qualifying relative. Your spouse is not your dependent. Your dependent's social security number is required as part of your return.
- If you claim someone as your dependent, they may still have to file their own tax return. It all depends upon the amount of their own income, both earned and unearned, their marital status, and any special taxes they may owe. They may not claim a personal exemption on their own tax return. This is true even if you do not actually claim them as your dependent on your tax return. The fact that your could claim that person disqualifies them from claiming a personal exemption.
A person must pass several qualifying tests in order for you to claim them as your dependent. The IRS has publication 501 which details how a person is qualified to be your dependent.
Should you have any questions about dependents and exemptions, the tax specialists at the Tax Office Inc., are here to provide the answers. We can let you know if a person qualifies as your dependent or answer any other tax question you might have.
