Your family is the most important part of your life. Your family is your history and your future. Part of the American dream is providing for your family and giving them the chance to live happily and grow into great members of society. However, in this difficult economy, you have to save more and more, and receive less for more work. Every bit of help you can find to save some money is crucial in getting you and your family through each day. These are a few ways to save as our taxes, exemptions and deductions rapidly change with our economy.
First, you need to know that your family is referred to as “dependents.” This may be less true in the case of a spouse, as they may even be making more money than you. If you have young children, you know that the term “dependent” is pretty accurate. To subtract from your Adjusted Gross Income, the IRS requires you to have such dependents and this is when family can help you save money on your tax returns.
Last year a new exemption allows you to benefit from a $3,650 break on your AGI for each qualifying child. They don't have to be biological, and can be a foster or step-sibling, and even grandchildren. These individuals must be 19 or under and live in your residence at least half the year. These children must not provide more than half of their own support or they do not qualify. More good news is that both you and your spouse may reap an additional $3,650 just for being parents as a personal exemption!
Children are not the only family members you can claim, but there are more strict requirements for claiming parents, grandparents or other relatives. These relatives are still worth $3,650 but have to qualify for these major stipulations. First, the person must be a full-time member of your household. Next, they must be a legal citizen of the United States and they cannot file a joint return with anyone. You must also provide the majority of their support and they must make less than $3,650 for their AGI.
You might be asking yourself, so who actually does qualify as a relative? They have to have first been a member of your household for the whole year you're claiming them, blood relative or not. If they didn't live with you the whole year, they have to be a bit closer to you. The relatives considered by blood and marriage are children, grandchildren(including steps), siblings(half and step), parents, grands and other direct ancestors. Stepparents, uncles, aunts, nieces, nephews, and immediate in-laws. Using these guidelines, your family can help you save in this troubled economy. Using a qualified tax professional like Online Tax Pros can help you file online and save the most on your refund! We look forward to seeing you save.