May I Claim A Dependent

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May I Claim A Dependent?

• The following will help you to know what the
  Internal Revenue Service decides on the
  dependency exemption

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(No Transcript)
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What Does The Internal Revenue Service Require?

• Generally, the exemptions allowed to a taxpayer
  are his personal exemption of 2,550 and an
  exemption of 2,550 for each dependent.
• A husband and wife filing a joint return are
  allowed at least two personal exemptions of
  2,550, since each spouse is regarded as a
  taxpayer, plus any exemptions for dependents.

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What Does The Internal Revenue Service Require? -
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• If a husband and wife file separate returns, each
  must take his or her own exemptions on the
  return. If, however, a husband or wife files a
  separate return and the other spouse has no gross
  income and is not the dependent of another
  taxpayer, the combined personal exemptions of the
  spouses may be claimed on the separate return

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Dependency Tests

• Five tests must be met before an exemption for a
  dependent is allowed
• Assuming that the support test is met, a full
  exemption may be claimed for a child born at any
  time during the tax year, so long as the child
  lives momentarily and the birth is recognized
  under state or local law as a live birth

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Test 1

• (1) The claimed dependent must have less than
  2,550 of gross income for the calendar year.This
  gross income test does not apply if the dependent
  is a child of the taxpayer and either is under
  age 19 at the close of the calendar year or is a
  full-time student under age 24 at the end of the
  calendar year

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Test 2

• (2) Over half of the dependent's total support
  for that calendar year must have been furnished
  by the taxpayer (with exceptions relating to
  multiple support agreements).

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Test 3

• (3) The dependent must fall within one of the
  following relationships
• (a) Son or daughter, grandchild, stepchild, or
  adopted child
• (b) Brother or sister
• (c) Brother or sister by the half blood
• (d) Stepbrother or stepsister
• (e) Mother or father, ancestor of either
• (f) Stepfather or stepmother
• (g) Son or daughter of taxpayer's brother or
  sister
• (h) Brother or sister of taxpayer's father or
  mother
• (i) Son-in-law, daughter-in-law, father-in-law,
  mother-in-law, brother-in-law, or sister-in-law
  (the widow of a taxpayer's deceased wife's
  brother is not considered a sister-in-law) or
• (j) A person (other than the taxpayer's spouse)
  who, during the taxpayer's entire tax year, lives
  in the taxpayer's home and is a member of the
  taxpayer's household (but not if the relationship
  between the person and the taxpayer is in
  violation of local law) (Code Sec. 152(a) and
  Code Sec. 152(b) )

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Test 4

• (4) The dependent must not have filed a joint
  return with his spouse

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Test 5

• (5) The dependent must be a citizen, national, or
  resident of the United States, a resident of
  Canada or Mexico at some time during the calendar
  year in which the tax year of the taxpayer
  begins, or an alien child adopted by and living
  with a U.S. citizen or national as a member of
  his household for the entire tax year (Code Sec.
  152(b)(3) Reg. 1.152-2(a)(2) )